Multiple choice

A sum of money invested at compound interest amounts to Rs. 4624 in two years and Rs. 4913 in three years. The sum invested is

  1. Rs. 4300

  2. Rs. 4350

  3. Rs. 4096

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

Amount after 3 years / Amount after 2 years = (1 + r/100) = 4913 / 4624 = 1.0625. So r = 6.25%. Principal = 4624 / (1.0625)^2 = 4624 / 1.1289 = 4096.

AI explanation

The ratio of the amount after three years to the amount after two years gives the annual compound interest multiplier: 4913 divided by 4624 equals 1.0625. This means the amount increases by 6.25% each year, so the multiplier is 17/16. The principal equals the two-year amount divided by the multiplier squared, so Principal equals 4624 divided by the quantity 17/16 squared. Since 4624 is 17 squared times 16, the principal is 16 cubed, which equals 4096.

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