Find the principal if the interest compounded at the rate of 12% per annum, compounding annually for 2 years is Rs. 1,908.

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SSC GD Constable (2022) Official Paper (Held On : 09 Feb 2023 Shift 1)
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  1. Rs. 6,500
  2. Rs. 5,400
  3. Rs. 7,500
  4. Rs. 4,500

Answer (Detailed Solution Below)

Option 3 : Rs. 7,500
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Detailed Solution

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Given

Compound interest after 2 years = Rs. 1,908

Rate of interest = 12% per annum

Concept:

CI = P [(1 + r/100)t - 1]

Solution:

CI = P [(1 + r/100)t - 1]

⇒ 1908 = P [(1 + 12/100)2 - 1]

⇒ 1908 = P [(1 + 3/25)2 - 1]

⇒ 1908 = P [(28/25)2 - 1]

⇒ 1908 = P [784/625 - 1]

⇒ 1908 = P × 159 / 625

⇒ P = 1908 × 625 / 159

⇒ P = 12 × 625 = Rs. 7500

Hence, the principal is Rs. 7,500.

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