Multiple choice

A sum of Rs. 2420 is accumulated in 2 years at 10% compound interest on a certain amount. Then, the original amount is

  1. Rs. 1000

  2. Rs. 2000

  3. Rs. 2500

  4. Rs. 3500
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Amount = P(1 + r/100)^n. 2420 = P(1 + 10/100)^2 = P(1.1)^2 = P(1.21). P = 2420 / 1.21 = 2000.

AI explanation

Using the compound interest formula, Amount = Principal x (1 + R/100)^T, we substitute the known values as 2420 = Principal x (1 + 10/100)^2. This simplifies to 2420 = Principal x 1.21, and solving for the principal gives Principal = 2420 / 1.21 = 2000. The result is Rs. 2000.

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