Multiple choice

What sum lent out at CI will amount to Rs. $968$ in $2$ years at $10$% p.a. interest?

  1. Rs. $800$
  2. Rs. $1000$
  3. Rs. $1200$

  4. None of these
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A Correct answer
Explanation

Amount = P(1 + r/100)^n. 968 = P(1 + 10/100)^2 = P(1.1)^2 = P(1.21). P = 968 / 1.21 = 800.

AI explanation

Using the compound interest present value formula P = A / (1 + R/100)^n, we substitute the given values to get P = 968 / (1 + 10/100)^2. This simplifies to 968 / (11/10)^2, which equals 968 / 1.21. Dividing 968 by 1.21 yields the principal amount of Rs. 800.

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