Multiple choice

What principal will amount to Rs. $19,488$ in two years, if the rates of interest for successive years are $16$% and $20$% respectively?

  1. $12,000$Rs
  2. $13,000$Rs
  3. $14,000$Rs
  4. $15,000$Rs
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let P be the principal. After year 1: P * 1.16. After year 2: (P * 1.16) * 1.20 = 19488. P * 1.392 = 19488. P = 19488 / 1.392 = 14000.

AI explanation

When rates are different for successive years, the amount A is found using A = P * (1 + R1/100) * (1 + R2/100). Substituting the given values gives 19488 = P * (1 + 16/100) * (1 + 20/100), which simplifies to 19488 = P * 1.16 * 1.20. Solving this equation, P = 19488 / 1.392, gives the principal as Rs 14000.

Keep practicing — related questions