Multiple choice

A sum of money put out at compound interest amounts in one year to Rs.4050 and in three years to Rs.4723.92. Find the original sum?

  1. Rs.4000

  2. Rs.5000

  3. Rs.6750

  4. Rs.3750
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Let P = principal, r = annual rate. After 1 year: P(1+r) = 4050. After 3 years: P(1+r)^3 = 4723.92. Dividing: (1+r)^2 = 4723.92/4050 = 1.1664, so 1+r = 1.08 (r = 8%). Then P = 4050/1.08 = Rs.3750. This uses compound interest formula A = P(1+r)^t.

Keep practicing — related questions