Question

What sum of money will amount to Rs 2508.80 at 12%p.a. rate of interest compounded annually in two years in a time? Please send pic

Answer 1

Let the Sum of Money be : S

We know that, Amount in Compound Interest is given by :

✿  $\mathsf{Amount = Principal(1 + \frac{Rate\;of\;Interest}{100})^n}$

where : n is the Number of Conversion periods

Given : Amount = 2508.80

Given : Rate of Interest = 12% per Annum

Given : Time Period = 2 Years Compounded Annually

As the Amount is Compounded Annually, The Number of Conversion Periods will be : 2

$\mathsf{\implies 2508.80 = S(1 + \frac{12}{100})^2}$

$\mathsf{\implies 2508.80 = S(1 + 0.12)^2}$

$\mathsf{\implies 2508.80 = S(1.12)^2}$

$\mathsf{\implies 2508.80 = S(1.2544)}$

$\mathsf{\implies S = \frac{2508.80}{1.2544}}$

$\mathsf{\implies S = 2000}$

The Sum of Money is ₹2000

Answer 2

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