What sum will amount to Rs. 23958 in 3 years at the rate of 10 percent per annum at compound interest (compounding annually)?
Show answer & explanation
Correct answer: A
Explanation
Given:
Amount (A) = ₹23958
Interest rate (R) = 10% per annum
Time (T) = 3 years
By the formula:
A = P(1 + R/100)ᵀ
23958 = P(1 + 10/100)³
23958 = P(1.1)³
23958 = P(1.331)
P = 23958 / 1.331
P = ₹18000