A certain sum amounts to Rs.280900 in 2 years at 6% per annum, interest compounded annually. The sum is:
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e Rs.2,50,000
⇒ Amount = P(1 + r / 100)t
Where P is the principal, r is the rate of interest compounded annually & t is the time period.
⇒ 280900 = P(1 + 6 / 100)2
⇒ P = 280900 / (1.06)2
⇒ P = 280900 / 1.1236
⇒ P = Rs.2,50,000