The amount at the end of the 2nd and 3rd years on a certain principal at CI is ₹9,680 and ₹10,648 respectively. Find the principal.
Show answer & explanation
Correct answer: B
Explanation
Given:
Amount at the end of the second year = 9680
Amount at the end of the third year = 10648
By the formula:
Aₙ = P(1 + r)ⁿ
Ratio of the amounts in the third and second years
10648 / 9680 = 1 + r
= 1.1
Amount in the second year
9680 = P(1.1)²
9680 = P × 1.21
P = 9680 / 1.21
P = ₹8000