A person borrows some money at the rate of 10% p.a. compound interest for three years. At the end of second years he deposit Rs. 7260 and at the end of third year he paid Rs.13310 and cleared his dues. Find the sum he borrowed.
Answer & explanation
Correct answer: option 3
Let the sum borrowed = 100x
Amount after 2 years at the rate of 10% = 100x × [\(\frac{11}{10}\)] × [\(\frac{11}{10}\)] = 121x
Now,
[121x – 7260] × [\(\frac{11}{10}\)] = 13310
⇒ 121x – 7260 = 12100
⇒ 121x = 19360
⇒ 100x = 16000