Multiple choice

The compound interest accrued on a certain amount at the rate of 12% p.a in two years is Rs 5724. What is the sum?

  1. Rs. 22500

  2. Rs. 20500

  3. Rs. 23500

  4. Rs. 24000

  5. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

CI = P[(1 + r/100)^n - 1]. Given CI = 5724, r = 12%, n = 2. So 5724 = P[(1.12)^2 - 1] = P[1.2544 - 1] = P(0.2544). Therefore P = 5724/0.2544 = 22500. This matches option A.

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