A certain sum, when invested for 2 years at 12% per annum compound interest, compounded annually, amounts to Rs. 39,200. Find the sum invested (in Rs.).
Show answer & explanation
Correct answer: B
Explanation
Given:
Final amount = ₹39,200
Interest rate = 12% per annum
Time = 2 years
By the formula:
A = P(1 + r/100)²
39,200 = P(1 + 12/100)²
39,200 = P(1.12)²
39,200 = P(1.2544)
P = 39,200 / 1.2544 = ₹31,250