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What is the sum (in Rs) of money which will become Rs 201840 at the rate of 16% per annum at compound interest in two years?
  • a)
    160000
  • b)
    150000
  • c)
    180000
  • d)
    200000
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
What is the sum (in Rs) of money which will become Rs 201840 at the ra...
The formula for A at annual compound interest, including principal sum, is:

Where:
A = Amount
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate = 16%
n = the number of times that interest is compounded per year, here n = 1
t = the number of years the money is invested or borrowed for, t = 2 yr
201840 = P(1 + 16/100)2
201840 = 1.3456P
P = Rs. 1,50,000
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What is the sum (in Rs) of money which will become Rs 201840 at the rate of 16% per annum at compound interest in two years?a)160000b)150000c)180000d)200000Correct answer is option 'B'. Can you explain this answer?
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