Question

What will be the sum of money which becomes Rs. 5290 in 2 years at 15% on the basis of compound interest?
1. Rs. 4000
2. Rs. 4200
3. Rs. 4500
4. Rs. 4800

Answer 1

Correct Answer - Option 1 : Rs. 4000

Given:

Amount received is Rs. 5290 on certain sum of money at 15% for 2 years

Formula used:

Amount = p × (1 + r/100)ⁿ

Compound interest = p × (1 + r/100)ⁿ - p

Calculation:

Let the sum of money invested is P

∴ 5290 = p × (1 + 15/100)²

⇒ P = Rs. 4000

Hence, option (1) is correct