Multiple choice

Any amount becomes 500 in 4 years at the rate of compound interest and becomes 800 in 8 years then what is the principal ?

  1. 320.50

  2. 291.50

  3. 312.50

  4. 340.50

  5. 325.20
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In compound interest, if amount becomes 500 in 4 years and 800 in 8 years, let principal be P and rate be r%. Then P(1 + r/100)⁴ = 500 and P(1 + r/100)⁸ = 800. Dividing: (1 + r/100)⁴ = 800/500 = 1.6. So P × 1.6 = 500, therefore P = 500/1.6 = 312.5. This is option C.

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