Question

Shubham borrowed a sum of money from Arjun. He returned him Rs. 2,51,878 in 2 years at 7% per annum compound interest. Find a sum of money he borrowed 
1. Rs. 1,30,000
2. Rs. 2,10,000
3. Rs. 2,20,000
4. Rs. 1,10,000

Answer 1

Correct Answer - Option 3 : Rs. 2,20,000

Given

Amount = Rs. 2,51,878

Formula used

Amount = principal( 1 + r%)^t

Where r and t are rate of interest and time

Calculation

Let the principal is Rs.P

2,51,878 = P(1 + 7%)²

⇒ (2,51,878 × 100 × 100)/(107 × 107) = P

⇒ 2,20,000 = P

∴ , principal is Rs. 2,20,000