Question

What sum will become $Rs2025$ in $2$ years at $12.5\%$ per annum compound interest?

Answer 1

For a given principle $\left(P\right)$ invested at $r\%$ for a time period of $n$ years at compound interest per annum given an amount (A)

$\Rightarrow A=p{(1+\frac{r}{100})}^n$

here, $A=Rs.2025$ $r=12.5\%$ $n=2year$

$\Rightarrow 2025=p{(1+\frac{12.5}{100})}^2$

$\Rightarrow 2025=p{\left(\frac{1125}{1000}\right)}^2$

$\Rightarrow 2025=p\times 1.265625$

$\Rightarrow p=\frac{2625}{1.265625}=1600$

$\therefore Rs.1600$ will yield $Rs.2025$ when invested at $12.5\%$ for $2year$ compund interest.

Hence, the answer is $Rs.1600.$