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Question : A sum becomes Rs. 1,352 in 2 years at 4% per annum compound interest. The sum is:

Option 1: Rs. 1,225

Option 2: Rs. 1,270

Option 3: Rs. 1,245

Option 4: Rs. 1,250


Team Careers360 25th Jan, 2024
Answer (1)
Team Careers360 27th Jan, 2024

Correct Answer: Rs. 1,250


Solution : Total amount = Principal + Compound interest = Rs. 1,352
Rate = 4%
Time = 2 years
Let $P$ be the principal.
We know, $\text{Total amount}=\text{Principal}×(1+\frac{\text{Rate}}{100})^{\text{Time}}$
$⇒ 1352 = P(1+\frac{4}{100})^{2}$
$⇒ 1352 = P(\frac{26}{25})^{2}$
$\therefore P = \frac{1352×25×25}{26×26}= 1250$
Hence, the correct answer is Rs. 1,250.

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