Question

Find the principal which will amount to rs 4500 in 2 years at the interest of 4%per annum compounded annually

Answer 1

Given

Principal Amount = (P) = ? (Required to find)

Rate of Interest Per Annum = (i) = 4%

Future Amount (inclusive of interest) = (F) = 4500

Time = (n) = 2 years

Interest Method = Compound Interest

We know that ...

Under compound Interest..

Future Amount (F) = P(1+i)^n

(where P = Principal Amount, i =Rate of Interest Per annum, n = No.of years)

Subsitute Given information in the above formula..

4500 = P ( 1 + 4%)^2

4500= P (1 + 4/100)^2

4500= P(1 + 0.04)^2

4500 =P (1.04)^2

4500 = P( 1.0816)

4500/1.0816 = P

4160.5 = P


So .... 4160.5 amounts to 4500 in 2 years at 4% compound Interest...

Answer 2

in this..

1st : divide 4 and 100 so it would be 0.04.

2nd: add 1 to it

3rd: take the square of it (1.04)

4th: divide 4500 and 1.0816

5th: 4160.5 is your principal

HOPE THIS WILL HELP YOU ....