Question
An amount is invested at a compound interest rate of 21%
per annum, with compounding occurring once every 10 months. After 20 months, the interest earned on the investment is ₹1,827. Determine the principal amount that was initially invested.Solution
Number of times the interest is compounded = 20 ÷ 10 = 2 Rate of interest = 21 X (10/12) = 17.5% Let the sum invested = Rs. 'Y' Then, Y X {1 + (17.5/100)}2 - Y = 1827 Or, Y X (47/40)2 - Y = 1827 So, (609Y/1600) = 1827 So, Y = (1827/609) X 1600 = 4800 So, sum invested = Rs. 4,800
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