If after two years a sum becomes ₹4000 and after four years it becomes ₹6000 at the same rate of compound interest (compounded annually), then what is the sum?
Answer & explanation
Correct answer: option 2
The Formula that we used here is -
Amount = P$(1 \;+\; \frac{R}{100})^t$
4000 = P [ 1 + \(\frac{R}{100}\) ]² -----(1)
& 6000 = P [ 1 + \(\frac{R}{100}\) ]4 ------(2)
Divide equation 2 by equation 1.
\(\frac{3}{2}\) = [ 1 + \(\frac{R}{100}\) ]²
By putting in equation 1 .
4000 = P × \(\frac{3}{2}\)
P = 2666.66