A sum becomes Rs.7436 in two years when interest is compounded annually at the rate of 4% per annum. What was the sum?
Answer & explanation
Correct answer: option 4
Amount = Principal × ( 1 + \(\frac{rate }{100}\) )t
7436 = Principal × ( 1 + \(\frac{4 }{100}\) )2
7436 = Principal × \(\frac{26 }{25}\) × \(\frac{26 }{25}\)
Principal = Rs. 6875