Question 85

A sum amounts to Rs 7727.104 at the rate of 12% per annum compounded annually after three years. What is the value of principal (in Rs)?

Solution

Let principal value = Rs. $$P$$

Rate of interest = 12% and time period = 3 years

=> Amount under compound interest = $$P(1+\frac{R}{100})^T$$

=> $$P(1+\frac{12}{100})^3=7727.104$$

=> $$P(\frac{28}{25})^3=7727.104$$

=> $$P=7727.104\times\frac{15625}{21952}$$

=> $$P=15625\times0.352=Rs.$$ $$5500$$

=> Ans - (D)

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