The compound interest on a certain sum in 2 years 6 month at 10% p.a., interest compounded yearly, is Rs. 1,623. The sum is:
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. Rs. 6000
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Concept |
Understanding |
Application |
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Cumulative rate of interest of x% and y% = x + y + (xy)/100 |
r = 10% CI = Rs. 1623 Time = 2.5 years Sum = P We need to calculate the cumulative rate of interest for 2.5 years when the rate is 10% per annum. |
Cumulative rate for 2 years = 10 + 10 + 100/100 = 21% Since there is half year more, rate will be half i.e. 5%. Cumulative rate for 2.5 years = 21 + 5 + (21 × 5)/100 = 26 + 1.05 = 27.05% Now, P × 27.05/100 = 1623 ⇒ P = 162300/27.05 ⇒ P = 6000 |