A principal becomes ₹1,458 at the rate of 8% per annum on compound interest in 2 years and interest is compounding annually. What is the principal?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. Rs 1,250
Amount = Principal (1 + Rate/100)time
Amount = ₹ 1458
Rate = 8% per annum
Time = 2 years
Calculation
⇒ 1458 = Principal (1 + 8/100)2
⇒ 1458 = Principal (108/100)2
⇒ Principal = ₹ 1250