Multiple choice

A person wants to invest some money at an interest of 9% compounded annually that must give Rs. 5346.45 after 2 years. How much money should he invest?

  1. Rs. 4000

  2. Rs. 4250

  3. Rs. 4500

  4. Rs. 4550

  5. Rs. 4050
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A = P(1 + r/100)^n. 5346.45 = P(1 + 0.09)^2 = P(1.09)^2 = P(1.1881). P = 5346.45 / 1.1881 = 4500.

AI explanation

Using the present value formula for compound interest, P = A / (1 + R/100)^n, we substitute the given values to find the principal. The calculation is 5346.45 / (1 + 9/100)^2, which simplifies to 5346.45 / (1.09 * 1.09). Dividing 5346.45 by 1.1881 gives the required investment of Rs. 4500.

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