A sum becomes ₹12100 in 2 years at 10% Compound Interest annually. Find the principal.
Show answer & explanation
Correct answer: A
Explanation
Given:
Amount (A) = 12100
Rate (R) = 10% per annum
Time (T) = 2 years
By the formula:
A = P(1 + R/100)ᵀ
12100 = P(1 + 10/100)²
12100 = P(1.1)²
12100 = P × 1.21
P = 12100 / 1.21
P = ₹10,000