Multiple choice

A certain sum is deposited for 4 years at a rate of 10% per annum on compound interest compounded annually. The difference between the interest at the end of 2 years and that at the end of 4 years is ₹5,082. Find the sum (in ₹).

  1. 20,000

  2. 25,500

  3. 50,820

  4. 10,164
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A Correct answer
Explanation

For principal P, after 2 years: A2 = P(1.1)² = 1.21P. After 4 years: A4 = P(1.1)⁴ = 1.4641P. Difference in interest = A4 - A2 = 1.4641P - 1.21P = 0.2541P = 5,082. Therefore P = 5,082/0.2541 = Rs 20,000.

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