Multiple choice

A sum of money at compound interest will amount to Rs. 650 at the end of the first year and Rs. 676 at the end of the second year. The amount of money is-

  1. Rs. 1300

  2. Rs. 650

  3. Rs. 1250

  4. Rs. 625

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

If amount grows from Rs. 650 to Rs. 676 in one year, the interest rate = (676-650)/650 = 26/650 = 0.04 or 4%. Since this is compound interest, the principal for first year = 650/1.04 = Rs. 625. Option D is correct.

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