Multiple choice

A man borrows a certain sum and pays back Rs. 6760 at the end of the year. If compound interest is reckoned at 4% per annum, then the sum borrowed by him was

  1. Rs. 6550

  2. Rs. 6500

  3. Rs. 6200

  4. Rs. 6000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Amount = P(1 + R/100)^n. 6760 = P(1 + 4/100)^1 = P(1.04). P = 6760 / 1.04 = 6500.

AI explanation

The formula for the present value on compound interest is Sum = Amount / (1 + R/100)^N. Substituting the given values gives 6760 / (1 + 4/100)^1 = 6760 / 1.04. Dividing 6760 by 1.04 gives the principal amount of Rs. 6500.

Keep practicing — related questions