₹x were borrowed at the compound interest rate of 5% per annum, 3 years back, where interest were compounding annually. If the present value of the money borrowed ₹18,522, what is the value of x?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. Rs.16000.
A = P(1 + R/100)T
where, A = Amount, P = Principal, R = Rate, and T = Time
⇒ 18522 = x(1 + 5/100)3
⇒ 18522 = x(1 + 1/20)3
⇒ 18522 = x × 21/20 × 21/20 × 21/20
⇒ (18522 × 20 × 20 × 20)/(21 × 21 × 21) = x
⇒ x = Rs.16000