Question

if compound interest is charged on a certain sum for 2 years at 10% the amount becomes 605/-. find the principal amount.

Answer 1

Answer:

Let the principal be x.

605=x(1+ 10/100)²=x(11/10)²

605=x*(121/100)

x=605*100 / 121

x=500

therefore principal money is Rs 500

Answer 2

The principal amount is 500/-.

Given,

Compound interest is charged on a certain sum for 2 years at 10%. The amount becomes 605/-.

To Find,

The principal amount =?

Solution,

It is given that the compound interest is charged on a certain sum for 2 years at 10%. The amount becomes 605/-. We have to find the principal amount.

$Amount = 605/-$

$Interest\: rate = 10$%

$Time = 2\: years$

$Principal =?$

The formula for finding the amount compounded annually is:

$Amount = P(1 + \frac{r}{100} )^{t}$

Where,

$P = Principal\\r = Rate\\t = Time$

Substituting the values in the above formula,

$605 = P(1 + \frac{10}{100})^{2}$

$605 = P(1 + 0.1)^{2}$

$605 = P*(1.1)^{2}$

$605 = P*1.21$

$P = \frac{605}{1.21} = 500/-$

Hence, the principal amount is 500/-.