Multiple choice

CI on a sum for 3 years at 16.67% rate of interest is Rs. 1587.5. Find the sum.

  1. 3500

  2. 2700

  3. 2550

  4. 3000

  5. None of these

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

16.67% is approximately 1/6. Using CI = P[(1 + r)³ - 1], where P is principal and r is rate: CI = P[(1 + 1/6)³ - 1] = P[(7/6)³ - 1] = P[343/216 - 1] = P(127/216). Given CI = 1587.5, so P = 1587.5 × 216/127 = 2700. Option B is correct.