Question

A sum of money amounts to Rs. 2809 in two years and
Rs. 2977.54 in three years at compound interest
annually. Find the sum:
A) 2800 b) 2000 c) 1950 d) 2500

Answer 1

Answer:

Let the Principle = P and rate of interest = r

So, as given in the problem

P * ( 1 + r/100)^2 = 2809 …..(1) and

P * ( 1 + r/100)^3 = 2977.54 …..(2)

Dividing eqn (3) by eqn (2), wehave,

[ P * ( 1 + r/100)^3 ] / [ P * ( 1 + r/100)^2 ] = 2977.54/ 2809

Or, 1 + r/100 = 1.06

Or, r = (1.06 - 1) * 100 = 6%

Putting the value of r in eqn (1)

P * (1.06)^2 = 2809

Or, P = 2809/ (1.06)^2 = 2500

So, Principle = Rs. 2500 and rate of interest = 6%