Question:
Rachana borrowed a certain sum at the rate of 15% per annum. If she paid at the end of two years Rs 1290 as interest compounded annually, find the sum she borrowed.
Solution:
Let the money borrowed by Rachana be Rs $\mathrm{x}$.
Then, we have:
$\mathrm{CI}=\mathrm{P}\left(1+\frac{\mathrm{R}}{100}\right)^{\mathrm{n}}-\mathrm{P}$
$1,290=\mathrm{x}\left[\left(1+\frac{15}{100}\right)^{2}-1\right]$
$1,290=\mathrm{x}[0.3225]$
$\mathrm{x}=\frac{1,290}{0.3225}$
= 4,000
Thus, Rachana borrowed Rs 4,000.