A sum of money becomes Rs.3364 at a rate of 16% compounded annually for 2 years. The sum of money is:
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. Rs.2500.
Amount = Principal(1 + Rate/100)Time = 3364
Time = 2 years
Rate = 16%
⇒ P(1 + 16/100)2 = 3364
⇒ P(29/25)2 = 3364
⇒ P = 3364(625)/841
⇒ P = 2102500/841
⇒ P = Rs. 2500