Question

A sum becomes ₹6,600 in 2 years and ₹7,920 in 3 years at compound interest. What is the original principal?

• A. ₹4,000.33
• B. ₹5,583.33
• C. ₹4,583.33
• D. ₹6,583.33

Answer 1

Answer:

C. ₹4,583.33

We are given:

• Amount after 2 years = ₹6,600

• Amount after 3 years = ₹7,920

• Interest is compound interest

  Find 1-year growth factor

$\frac{7920}{6600} = 1.2$

So,
1 + r = 1.2

Find principal

After 2 years:
$P(1.2)^2 = 6600$
$P \times 1.44 = 6600$
$P = \frac{6600}{1.44}$

$P = 4583.33$