Multiple choice

A sum amounts to Rs. 4,410 after two years at 5% compound interest per annum. What is the principal?

  1. Rs. 3,000

  2. Rs. 4,100

  3. Rs. 4,000

  4. Rs. 4,200
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A = P(1 + r/100)^n. 4410 = P(1 + 5/100)^2 = P(1.05)^2 = P(1.1025). P = 4410 / 1.1025 = 4000.

AI explanation

To find the principal, we use the compound interest formula: Amount equals Principal multiplied by (1 plus R divided by 100) raised to the power of n. Substituting the given values, we get 4410 equals Principal multiplied by (1 plus 5 divided by 100) squared, which simplifies to 4410 equals Principal multiplied by 1.05 squared. This yields Principal equals 4410 divided by 1.1025, which equals 4000. Therefore, the principal is Rs. 4,000.

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