A sum invested at a certain rate of interest per annum, compounded annually, amounts to ₹3,600 in 2 years and to ₹6,480 in 4 years. What is the sum invested?
Amount after 2 years = $$principal\left[\left(1+\frac{rate}{100}\right)^{time}\right]$$
$$3600 = principal\left[\left(1+\frac{rate}{100}\right)^{2}\right]$$ Eq.(i)
Amount after 4 years = $$principal\left[\left(1+\frac{rate}{100}\right)^{time}\right]$$
$$6480 = principal\left[\left(1+\frac{rate}{100}\right)^{4}\right]$$
$$6480=principal\left(1+\frac{rate}{100}\right)^2\ \left(1+\frac{rate}{100}\right)^2$$
Put Eq.(i) in the above equation.
$$6480=3600\times\ \ \left(1+\frac{rate}{100}\right)^2$$
$$\frac{6480}{3600}=\ \ \left(1+\frac{rate}{100}\right)^2$$ Eq.(ii)Put Eq.(ii) in Eq.(i).
$$3600 = principal \times \frac{6480}{3600}$$
principal = $$\frac{3600\times3600}{6480}$$
= $$\frac{12960000}{6480}$$
= ₹2,000
So the sum invested is ₹2,000.
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