Question
A certain sum is invested on compound interest at 18%
per annum for 1 year 4 months, the interest being compounded 8-months, If the compound interest is â‚ą3,816, then find the sum (in â‚ą).Solution
1 year 4 months = 16 months So, for 8 monthly compound interest t will be 16/8 = 2 Now, 18% for 12 months So, 12% for 8 months Let the principal be P So, 3816 = P (1 + 12/100)2 - P 3816 = P (112/100)2 - P 3816 = P (28/25)2 - P 3816 = (784P / 625) - P 3816 = (784P - 625P) / 625 Â 3816 Ă— 625 = 159P Â P = 24 Ă— 625 Â P = 15000 So, principal = Rs. 15000
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