Question

The amount obtained on a certain sum at compound interest (compounded annually) after 2 years and 3 years is Rs.11520 and Rs.13824 respectively. What is that amount?

• A. Rs. 6000
• B. Rs. 8000
• C. Rs. 9000
• D. Rs. 7000

Answer 1

Answer:

B. Rs. 8000

Solution: Given Data: Amount after 2 years: Rs.11520 Amount after 3 years: Rs.13824 Compound interest is compounded annually Formula Used: Use the formula for compound interest, A = P (1 + r/100)n, Where A is the amount, P is the principal, r is the rate of interest, n = time Calculation: Using the given data for 2 years, we have: A1 = 11520 = P (1 + r/100)2 -----(1) Using the given data for 3 years, we have: A2 = 13824 = P (1 + r/100)3 ----(2) Dividing the second equation by the first equation, we get: (1 + r/100) = 13824 / 11520 = 1.2 Substituting this back into the equation for 2 years: P (1.2)2 = 11520 P (1.44) = 11520 P = 11520 / 1.44 = 8000