Q7 of 94 Page 29

Find the Principle that will yield a compound interest of Rs. 1,632 in 2 years at 4% rate of interest per annum.

Let x be the principle

Rate of interest = 4%


Time = 2 years


Compound interest = 1,632


Amount = x


= x


= 1.0816x


Compound interest = amount – principle


1,632 = 1.0816x – x


= x


X = 20,000


∴ principle is 20,000


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