Find the principal if the interest compounded annually at the rate of 10%

Question:

Find the principal if the interest compounded annually at the rate of 10% for two years is Rs 210.

Solution:

Let the sum be Rs $\mathrm{x}$.

We know that:

$\mathrm{CI}=\mathrm{A}-\mathrm{P}$

$=\mathrm{P}\left(1+\frac{\mathrm{R}}{100}\right)^{\mathrm{n}}-\mathrm{P}$

$=\mathrm{P}\left[\left(1+\frac{\mathrm{R}}{100}\right)^{\mathrm{n}}-1\right]$

$210=\mathrm{x}\left[\left(1+\frac{10}{100}\right)^{2}-1\right]$

$210=\mathrm{x}\left[(1.10)^{2}-1\right]$

$\mathrm{x}=\frac{210}{0.21}$

$=1,000$

Thus, the required sum is Rs 1,000 .

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