Compound interest (compounding annually) on a sum for 2 years is Rs. 4180. If rate of interest is 20 percent per annum then what is the sum?
Answer & explanation
Correct answer: option 3
Compound interest at rate of 20% p.a. for 2 years = 20 + 20 + \(\frac{20×20}{100}\)
= 40 +4
= 44%
ATQ,
44% = 4180
1% = \(\frac{4180}{44}\) = 95
Initial sum = 100% = 100 × 95 = 9500