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Rachana Borrowed a Certain Sum at the Rate of 15% per Annum. If She Paid at the End of Two Years Rs 1290 as Interest Compounded Annually, Find the Sum She Borrowed.

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Question

Rachana borrowed a certain sum at the rate of 15% per annum. If she paid at the end of two years Rs 1290 as interest compounded annually, find the sum she borrowed.

Sum
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Solution

Let the money borrowed by Rachana be Rs x.
Then, we have: 
\[CI = P \left( 1 + \frac{R}{100} \right)^n - P\]
\[1, 290 = x\left[ \left( 1 + \frac{15}{100} \right)^2 - 1 \right]\]
\[1, 290 = x\left[ 0 . 3225 \right]\]
\[x = \frac{1, 290}{0 . 3225}\]
\[ = 4, 000\]
Thus, Rachana borrowed Rs 4, 000.

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