Question

Find the principal if the interest compounded annually at the rate of 10% for two years is Rs 210.

Answer 1

Let the sum be Rs x.
We know that: 
CI = A - P
\[ = P \left( 1 + \frac{R}{100} \right)^n - P\]
\[ = P\left[ \left( 1 + \frac{R}{100} \right)^n - 1 \right]\]
\[210 = x\left[ \left( 1 + \frac{10}{100} \right)^2 - 1 \right]\]
\[210 = x\left[ \left( 1 . 10 \right)^2 - 1 \right]\]
\[x = \frac{210}{0 . 21}\]
\[ = 1, 000\]
Thus, the required sum is Rs 1, 000.