Question

Find the principal that will yield a compound interest of ₹1632 in 2 years at 4% rate of interest per annum

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Answer 1

Given -

• Compound interest = ₹1632
• Number of years (n) = 2 years
• Rate of interest(r) = 4%

To find -

• Principal =?

Solution -

Let 'P' be the Principal

We know that,

Compound interest = Amount - Principal

$compound \: interest = P(1 + \frac{r}{100} ) {}^{n} - P$

Putting the values,

$1632 = P (1 + \frac{4}{100} ) {}^{2} - P$

$1632 = P (1 + \frac{1}{25} ) {}^{2} - P$

$1632 = P ( \frac{26}{25} ) {}^{2} - P$

$1632 = P ( \frac{676}{625} ) - P$

$1632 = \frac{676P }{625} - P$

$1632 = \frac{676P - 625P }{625}$

$1632 = \frac{51P }{625}$

$1632 \times 625 = 51P$

$51P = 1020000$

$P = \frac{1020000}{51}$

$P = 20000$

Therefore Principal = ₹20000