A certain sum amounts to Rs1 543 50 when invested for 2 years at 5 per annum compound interest What ...........

Quantitative Aptitude (MTS) Compound Interest

A certain sum amounts to Rs1,543.50 when invested for 2 years at 5% per annum compound interest. What is the sum (in Rs)?

1,500

1,400

1,200

1,600

To solve for the original sum using the compound interest formula, follow these steps:

- Formula Used: The compound interest formula is A = P(1 + r/n)^(nt).

- Here, A is the amount after time t, P is the principal sum, r is the annual interest rate, and n is the number of compounding periods per year.

- Given Data:

- A = Rs1,543.50

- r = 5% per annum

- t = 2 years

- n = 1, since interest is compounded annually

- Substitution:

- 1,543.50 = P(1 + 0.05)^2

- Calculation:

- 1,543.50 = P(1.1025)

- P = 1,543.50 / 1.1025 ˜ Rs1,400

- Options Evaluation:

- Option 1: Rs1,500

- Option 2: Rs1,400

- Option 3: Rs1,200

- Option 4: Rs1,600

- Conclusion:

- The correct option is Option 2: Rs1,400 .

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