At a certain rate of interest compounded annually, a sum amounts to Rs.10,890 in 2 years and to Rs.11,979 in 3 years. The sum is:
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. Rs.9,000.
Sum after 2 years = Rs. 10890
Sum after 3 years = Rs. 11979
Interest for one year = (11979 - 10890) = Rs. 1089
C.I. for 1 year = S.I. for 1 year
Interest = PRT/100
⇒ 1089 = 10890 × R × 1/100
⇒ R = 10%
Let the sum be Rs. x
Amount = Rs. 10890
Time = 2 years
R = 10%
Amount = P(1 + R/100)T
⇒ 10890 = P(1 + 10/100)2
⇒ 10890 = P(11/10)2
⇒ 10890 = P(121/100)
⇒ P = 1089000/121
⇒ P = Rs. 9000