A sum of money becomes ₹ 3,364 at a rate of 16% compounded annually for 2 years. The sum of money is:
Answer & explanation
Correct answer: option 1
The formula that we used here is :-
Amount = P$(1 \;+\; \frac{R}{100})^t$
3364 = P [ 1 + \(\frac{16}{100}\) ]²
3364 = P [ \(\frac{29}{25}\) ]²
P = 3364 × \(\frac{25}{29}\) × \(\frac{25}{29}\)
= 2500
So, Initial sum is = Rs. 2500