Question

Find the principal if the amount at the end of two years at 10% PA compounded annually is Rs.7986

Answer 1

Solutions:

• Let after t years the principal of 6000

• amount to 7986.

• Principal= 6000

• Rate of interest= 10% = 0.1

• Amount=7986

The formula for amount is

A= P(1+r)^t

where , P is principal, r is interest rate and t is time in years .

=> 7986=6000(1+0.1)^t

=> 7986/6000=(1.1)^t

=> 1331/1000=(11/10)^t

=> (11/10)³= (11/10)^t

On comparing both sides, we get

t=3

Therefore, after side the principal of 6000 amount to 7986.

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