Maths · Arithmetic and Geometric progressions

On what sum will the compound interest at p.a.for 2 years compounded annually be

On what sum will the compound interest at \( 5 \% \) p.a.for 2 years compounded annually be Rs. \( 1,640 ? \)

  • A. 16,000
  • B. 630.50
  • C. 425.76
  • D. 1,640

Step-by-step solution

Let the principal be P. Compound interest = P[(1 + r/100)^n - 1] = P[(1.05)^2 - 1] = P(1.1025 - 1) = 0.1025P. Given CI = 1640, so 0.1025P = 1640, thus P = 1640 / 0.1025 = 16000.
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