A certain sum on compound interest becomes ₹56,180 when compounded annually after 2 years and ₹59,550.80 after 3 years. Find the sum (in ₹).

Question

Question

This question was previously asked in

RRB NTPC CBT 2 Level -6 Official paper (Held On: 9 May 2022 Shift 1)

Answer 1

Given:

A certain sum on compound interest becomes ₹56,180 when compounded annually after 2 years and ₹59,550.80 after 3 years.

Concept used:

Compound interest, CI = P(1 + R/100) n - P

where

P = Principal amount

R = Rate of interest per year

N = Time in years

Calculation:

Amount at the end of the second year, A 2 = ₹56,180

Amount at the end of the third year, A3 = ₹59,550.80

Hence, interest incurred during the second year to the third year = 59,550.80 - 56,180 = ₹3370.8

Let the principal sum be Rs. P and the rate of interest be R%.

CI of the first year = SI of the first year

⇒ ₹3370.8 = (∵ for the second year, the principal amount should be Rs. 56,180)

⇒ R = 6%

According to the question,

P(1 + 6/100)2 = 56,180

⇒ P = 50000

∴ The principal amount is ₹50000.