Question

What principal will amount to Rs. 9,856 in two years, if the rates of interest for successive years are 10% and 12% respectively ?

Answer 1

Given : A = Rs. 9,856 ; n = 2 years ;  r₁ = 10 % and r₂ = 12%

Amount = `"P"( 1 + r_1/100)( 1 + r_2/100)`

⇒ 9,856 = `"P"( 1 + 10/100 )( 1 + 12/100)`

⇒ 9,856 = `P(11/10)(28/25)`

⇒ P = Rs. `[9,856 xx 10 xx 25]/[11 xx 28]` = Rs. 8,000