Find the principal if the compound interest is charged on the principal at the rate of \(16\frac{2}{3}\%\) per annum for two years and the sum becomes Rs. 196.

Question

Question

This question was previously asked in

UGC NET Paper 1: Held on 14th Oct 2022 Shift 1

Answer 1

Given:

The principal if the compound interest is charged on the principal at the rate of \(16\frac{2}{3}\%\) per annum for two years.

Formula Used:

A = P x (1 + r/100)ⁿ,

where A is the final amount,

P is the principal amount,

r is the interest rate,

and n is the number of compounding periods.

Calculation:

In this case, n = 2 and

r = \(16\frac{2}{3}\%\) .

So,
196 = P * (1 + \(16\frac{2}{3}\) /100)²

⇒ P = 196 / (1 + \(16\frac{2}{3}\) /100)²

⇒ P = 196 / (1 + 0.166)2

⇒ P = 196 / 1.34996

⇒ P ≈ 144

So, the principal amount is approximately Rs. 144.