Question

Karan earned an interest of 520 on certain sum of money, invested at 8% p.a. compounded annually for two years. Find the principal that will yield an interest of 520.​

Answer 1

Solution,

To find

• The principal that will yield an interest of 520

Now,

The formula is => C.I = P {(1+R/100)ⁿ -1}

₹ 520 = P { (1+8/100)² -1 }

₹ 520 = P {1 +2/25)² -1 }

₹ 520 = P { ( 25 + 2/25)² -1 }

₹ 520 = P { (27/25)² -1 }

₹ 520 = P {( 729/625) -1 }

₹ 520 = P (104/625)

$\implies \sf \: \frac{ \cancel{520 } \times 625}{ \cancel{104}} = 5 \times 625 \: = p \\ \: \\ \implies \rm \: 3125 = p$

So,

P = 3125

Hence, the principal that will yield an interest of ₹520 in ₹3126.