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A sum becomes Rs.7436 in two years when interest is compounded annually at the rate of 4% per annum. What was the sum?
Rs.7,075
Rs.6,275
Rs.6,575
Rs.6,875
- The amount after 2 years with compound interest is Rs.7436.
- The interest rate given is 4% per annum.
- To find the original sum (principal), use the compound interest formula:
A=P(1+r100)n
where A=7436, r=4, n=2.
- Rearrange formula and solve for P:
7436=P(1+4100)2
7436=P×(1.04)2
7436=P×1.0816
P=74361.0816≈6875
- Calculation shows the original sum was Rs.6,875.
- Correct Answer: Option 4: Rs.6,875
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