Numerical answer
A sum of money, invested at compound interest compounded annually, amounts to ₹8,820 in 2 years and to ₹9,261 in 3 years. What is the sum invested (in ₹)?
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Answer: 8000
The amount at the end of year 3 is the year-2 amount grown by one year's interest.
9261/8820 = 1.05, so the rate is 5% per annum.
Then P × (1.05)² = 8820 ⇒ P = 8820/1.1025 = ₹8,000.
Tip: 9261 = 21³ and 8820 = 20 × 21², so the principal is 20³ = 8000 — spotting cubes saves the division.
9261/8820 = 1.05, so the rate is 5% per annum.
Then P × (1.05)² = 8820 ⇒ P = 8820/1.1025 = ₹8,000.
Tip: 9261 = 21³ and 8820 = 20 × 21², so the principal is 20³ = 8000 — spotting cubes saves the division.
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