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A sum of money becomes ₹13,380 after 3 years and ₹20,070 after 6 years on compound Interest. Find the sum?
Let us assume that the interest rate is r. And the principal amount is P.
The sum after three years would be, $$P\left(1+\frac{r}{100}\right)^3$$, we are told that this value is 13380.
Similarly, the sum after six years would be, $$P\left(1+\frac{r}{100}\right)^6$$, we are told that this value is 20,070.
Let us divide the latter by the former, we get,
$$\frac{P\left(1+\frac{r}{100}\right)^6}{P\left(1+\frac{r}{100}\right)^3}=\frac{20070}{13380}=1.5$$
Therefore, $$\left(1+\frac{r}{100}\right)^3=1.5$$
Substituting this value in the first equation we have, $$P\left(1.5\right)=13380$$
We get P = 8920.
Hence, the answer is Option D.
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