Question

The CI earned by a sum of money in 2 years at 5% p.a. is ₹ 4305. Find the sum.

Answer 1

Given:

• Time period, T = 2 years
• Rate of interest, R = 5%
• Compound interest = ₹ 4305

Compound interest = `P(1 + R/100)^T - 1`, where P is the principal, R is the rate of interest and T is the time period.

∴ `P(1 + 5/100)^2  = 4305`

⇒ `P[(21/20)^2 - 1] = 4305`

⇒ `P[441/400 - 1] = 4305`

⇒ `P[(441 - 400)/400] = 4305`

⇒ `P = (4305 xx 400)/41`

⇒ `P = 42000`

Hence, the sum is ₹ 42000.