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Question : The compound interest on INR 18,000 at 7% per annum, compounded annually, is INR 1,260. What is the period?

Option 1: 1 year

Option 2: 2 years

Option 3: 3 years

Option 4: 4 years


Team Careers360 14th Jan, 2024
Answer (1)
Team Careers360 22nd Jan, 2024

Correct Answer: 1 year


Solution : Use : 
A = P × $[1+ \frac{R}{100}]^{t}$
A = CI + P, where
A = Amount, CI = Compound interest, P = Principal, R = Rate of interest, t = time
According to the question
⇒ A = CI + P = 1260 + 18000  = Rs.19,260
⇒ 19260 = 18000 × $[1+ \frac{7}{100}]^{t}$
⇒ 19260 = 18000 × $[1.07]^{t}$
⇒ [1.07]$^{t}$ = $\frac{19260}{18000}$
⇒  [1.07]$^{t}$ = 1.07
⇒ t =  1
Hence, the correct answer is 1 year

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