Practicing Success

Target Exam

CUET

Subject

General Test

Chapter

Numerical Ability

Topic

Compound Interest

Question:

A sum invested at compound interest (compounded annual) amounts to ₹750 at the end of first year and ₹900 at the end of second year. What is the sum?

Options:

₹700

₹625

₹600

₹650

Correct Answer:

₹625

Explanation:

Difference in compound interest of 1st and 2nd year = 900 - 750

= Rs. 150

Rate of interest = \(\frac{150}{750}\)  × 100%

= 20%

Now,

Amount = P$(1 \;+\; \frac{R}{100})^t$

750 = P [ 1 + \(\frac{20}{100}\) ] 

750 = P [ \(\frac{6}{5}\) ]

P = Rs. 625