Multiple choice

The compound interest on a certain sum of money for 2 years at 8% is Rs 624, then the sum is:

  1. 3550

  2. 3750

  3. 3650

  4. 4000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For compound interest: CI = P(1+r/100)^n - P. Given CI=624, r=8%, n=2. So 624 = P(1.08)^2 - P = P(1.1664 - 1) = P(0.1664). Therefore P = 624/0.1664 = 3750. The principal sum is Rs 3750. Verification: 3750 at 8% for 2 years gives CI = 3750×0.1664 = 624.

Keep practicing — related questions