Inverse Problems on Compound Interest - Principal
Inverse Problems on Compound Interest - Finding Principal
In this section, we shall discuss how to compute Principal when compound interest , Amount , Rate and time period is given.
Illustration: The difference between the compound interest and simple interest on a certain sum of money at 10% per annum for 2 years is Rs 500. Find the sum when the interest is compounded annually.
Solution: Let the sum be Rs 100.
Computation of compound interest :
We have, Principal = Rs 100, R = 10% per annum and n = 2
So,
= Rs 21
Computation of simple interest :
We have, Principal = Rs 100, R = 10% per annum and time = 2 years
Now, difference in C.I. and S.I. = Rs(21 - 20) = Rs 1
Now,
If difference between C.I. and S.I. is Re 1, sum = Rs 100
If difference between C.I. and S.I. is Rs 500, Sum = Rs (100 X 500) = Rs 500000
Hence, Principal = 500000
Find the Principal if the compound interest compounded annually at the rate of 5% per annum for three years is Rs 157625 | |||
| Right Option : D | |||
| View Explanation | |||
What sum will become Rs 9826 in 18 months if the rate of interest is | |||
| Right Option : C | |||
| View Explanation | |||
The difference between the compound interest and simple interest on a certain sum of money at 5% per annum for 2 years is Rs 700. Find the sum when the interest is compounded annually. | |||
| Right Option : A | |||
| View Explanation | |||
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