Multiple choice

A sum of money at compound interest amounts to Rs. 3630 in two years and to Rs. 3993 in three years. Find the original sum.

  1. Rs. 2500

  2. Rs. 2800

  3. Rs. 3000

  4. Rs. 3200
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The ratio of the amount after three years to the amount after two years gives (1 + R/100) = 3993 / 3630 = 1.1, which means the annual interest rate is 10%. Substituting this rate back into the formula for the amount after two years, we get P * (1.1)^2 = 3630, which simplifies to P = 3000.

AI explanation

The interest for the third year is the difference between the amounts, which is 3993 - 3630 = 363. This implies the rate of interest is 363 / 3630 = 0.1 or 10 percent. The original sum is the two year amount divided by (1.1)^2, giving 3630 / 1.21 = 3000. The original sum is Rs. 3000.

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