Single correct option
A sum of money invested at compound interest (compounded annually) amounts to ₹7,260 in 2 years and to ₹7,986 in 3 years. What is the sum?
- A. ₹5,800
- B. ₹6,000
- C. ₹6,050
- D. ₹6,200
Show answer and solution
Answer: (B) ₹6,000
Amounts at the end of consecutive years differ by a factor of (1 + r).
1 + r = 7986/7260 = 1.1, so r = 10% per annum.
Amount after 2 years = P × 1.1² = 1.21P = 7260, giving P = 7260/1.21 = ₹6,000.
Check: 6000 × 1.331 = 7986 ✓.
Tip: Under CI the amount forms a GP; the ratio of successive years' amounts gives the rate directly.
1 + r = 7986/7260 = 1.1, so r = 10% per annum.
Amount after 2 years = P × 1.1² = 1.21P = 7260, giving P = 7260/1.21 = ₹6,000.
Check: 6000 × 1.331 = 7986 ✓.
Tip: Under CI the amount forms a GP; the ratio of successive years' amounts gives the rate directly.
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