On what sum of money will the compound interest for 3 years at 5% per annum amount to 630.50?

  1. Rs.  1200
  2. Rs. 1261
  3. Rs. 4000
  4. Rs. 3000
Anurag Mishra Professor Asked on 23rd January 2016 in Maths.
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1 Answer(s)

Answer: (3) Rs. 4000

Explanation: –
  Let the principal be Rs. X

Given-
Time = 3 years,  Rate = 5%  Compound Interest = Rs. 630.50

630.50 =  X {(1 + 5/100)^3 – 1}
  = X { (21/20)^3 – 1}
  = X { 21 x 21 x 21 /20 x 20 x 20 – 1}
  = X (9261 – 8000)/8000
 630.50 = 1261 X/8000 
X = 630.50 x 8000 /1261
  X = 4, 000

Then, the principal will be Rs. 4, 000

Hence, the correct answer is option (3) Rs. 4, 000.

Anurag Mishra Professor Answered on 23rd January 2016.
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