The compound interest on a certain sum invested for 2 years at 10% per annum is Rs. 1522.50, the interest being compounded yearly. The sum is?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. Rs 7250
Compound interest = Rs. 1522.50
Rate% = 10%
Time = 2 years
We know that the successive rate% for 2 years
= 10 + 10 + (10 x 10)/100 = 21% (Successive percentage change formula)
Let Principal amount be Rs. P
Hence 21% of P = 1522.50
⇒ (21/100) x P = 1522.5
Hence,
P = (1522.50 x 100)/21 = Rs 7250