A sum of money amounts to Rs. 28224 in 2 years and to Rs. 29635.20 in 3 years when invested on compound interest, compounded annually. what is the sum of money?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. Rs. 25600
Amount after 1 year = (29635.2 × 29635.2)/28224
⇒ 26880
Rate of interest = [(28224 - 26880)/26880] × 100 = 5%
The amount of money after 1 year = P + 5% of P
⇒ P + 0.05P = 26880
⇒ 1.05P = 26880
⇒ P = Rs. 25,600