Multiple choice

Ram invested a certain amount in a scheme at compound interest and the amount increased to Rs. 4624 in 2 years and to Rs. 4913 in 3 years. What was the amount invested by Ram?

  1. Rs. 4096

  2. Rs. 4260

  3. Rs. 4335

  4. Rs. 4360
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Let P be the principal and r be the interest rate. P(1+r)^2 = 4624 and P(1+r)^3 = 4913. Dividing the second by the first gives (1+r) = 4913/4624 = 1.0625. Then P = 4624 / (1.0625)^2 = 4096.

AI explanation

To find the initial principal from the maturity amounts for consecutive years, divide the amount at the end of 3 years by the amount at the end of 2 years to get the annual growth factor. This gives 4913 divided by 4624, which simplifies to 1.0625. Multiplying the 2-year amount by the reciprocal of this factor, 4624 multiplied by 16 and divided by 17, yields the original invested amount of Rs. 4096.

Keep practicing — related questions