A loan was taken on compound interest at rate of 10p.c.p.a .It was settled after 3 years by paying rupees 26,620 .How many rupees of loan was taken ?
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The loan taken was of Rs 20000
Let the Principal money be Rs P
And, Amount money be Rs A, which is equal to Rs 26,620.
Time period (n) = 3 years
Rate (r) = 10% p.a.
The relation between A and P is given as:
A = P[(1 + r/100)ⁿ]
Substituting the values, we get,
26620 = P[(1 + 10/100)³]
⇒ P[(110/100)³] = 26620
⇒ (1.1)³P = 26620
⇒ P = 26620/(1.1)³ = 20000
So, P = Rs 20000
This is the required answer.
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