Find the principal if compound interest for 2 years is Rs. 4,070 and

1.	Find the principal if compound interest for 2 years is Rs. 4,070 and rate of interest is 5.55% per annum1. Rs. 35,5402. Rs. 35,6403. Rs. 45,4404. Rs. 36,450
Answer» Correct Answer - Option 2 : Rs. 35,640 Given: Compound interest = Rs. 4,070 Rate = 5.55% Time = 2 years Concept used: 11.11% = 1/9 Formula used: C.P = P{(1 + R/100)T – 1} Where, C.P → Compound interest P → Principal R → Rate T → Time Calculations: 11.11% = 1/9 ⇒ (11.11%)/2 = 1/(9 × 2) ⇒ 5.55% = 1/18 Now, C.I. = P{(1 + R/100)^T– 1} ⇒ 4070 = P{(1 + 5.55/100)² – 1)} ⇒ 4070 = P {(1 + 1/18)² – 1} ⇒ 4070 = P{(19/18 × 19/18) – 1} ⇒ 4070 = P{(361 – 324)/324} ⇒ 4070 = P × (37/324) ⇒ P = (4070 × 324)/37 ⇒ 110 × 324 ⇒ Rs. 35,640 ∴ The principal is Rs. 35,640

Find the principal if compound interest for 2 years is Rs. 4,070 and rate of interest is 5.55% per annum1. Rs. 35,5402. Rs. 35,6403. Rs. 45,4404. Rs. 36,450

Answer» Correct Answer - Option 2 : Rs. 35,640

Given:

Compound interest = Rs. 4,070

Rate = 5.55%

Time = 2 years

Concept used:

11.11% = 1/9

Formula used:

C.P = P{(1 + R/100)T – 1}

Where,

C.P → Compound interest

P → Principal

R → Rate

T → Time

Calculations:

11.11% = 1/9

⇒ (11.11%)/2 = 1/(9 × 2)

⇒ 5.55% = 1/18

Now, C.I. = P{(1 + R/100)^T– 1}

⇒ 4070 = P{(1 + 5.55/100)² – 1)}

⇒ 4070 = P {(1 + 1/18)² – 1}

⇒ 4070 = P{(19/18 × 19/18) – 1}

⇒ 4070 = P{(361 – 324)/324}

⇒ 4070 = P × (37/324)

⇒ P = (4070 × 324)/37

⇒ 110 × 324

⇒ Rs. 35,640

∴ The principal is Rs. 35,640

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