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On a certain sum of money, the total compound interest earned (with in- terest being compounded annually) at the end of 3 years is ₹2,170. Total com- pound interest at the end of 2 years is ₹1,360. Find the sum of money initially invested?
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On a certain sum of money, the total compound interest earned (with in...
**Solution:**

Let's assume the principal sum of money initially invested is P.

**Step 1:** Calculating the compound interest for 3 years.
The formula for compound interest is given by:
\[A = P\left(1 + \frac{r}{100}\right)^n\]
where A is the total amount after n years, P is the principal, and r is the rate of interest.

Given that the total compound interest earned at the end of 3 years is ₹2,170, we can write the equation as:
\[A = P\left(1 + \frac{r}{100}\right)^3\]
\[A - P = P\left(1 + \frac{r}{100}\right)^3 - P\]
\[2170 = P\left(\left(1 + \frac{r}{100}\right)^3 - 1\right)\] ---(Equation 1)

**Step 2:** Calculating the compound interest for 2 years.
Using the same formula, we can calculate the total amount after 2 years:
\[A = P\left(1 + \frac{r}{100}\right)^2\]
\[A - P = P\left(1 + \frac{r}{100}\right)^2 - P\]
\[1360 = P\left(\left(1 + \frac{r}{100}\right)^2 - 1\right)\] ---(Equation 2)

**Step 3:** Solving the equations.
Now, let's solve equations (1) and (2) to find the values of P and r.

Dividing equation (1) by equation (2):
\[\frac{2170}{1360} = \frac{P\left(\left(1 + \frac{r}{100}\right)^3 - 1\right)}{P\left(\left(1 + \frac{r}{100}\right)^2 - 1\right)}\]
\[\frac{2170}{1360} = \frac{\left(1 + \frac{r}{100}\right)^3 - 1}{\left(1 + \frac{r}{100}\right)^2 - 1}\]

Simplifying the equation, we get:
\[\frac{2170}{1360} = \frac{\left(1 + \frac{r}{100}\right)^3 - 1}{\left(1 + \frac{r}{100}\right)^2 - 1}\]
\[\frac{2170}{1360} = \frac{\left(1 + \frac{r}{100}\right)^3 - 1}{\left(1 + \frac{r}{100}\right) - 1}\]
\[\frac{2170}{1360} = \frac{\left(1 + \frac{r}{100}\right)^3 - 1}{\frac{r}{100}}\]
\[\frac{2170}{1360} = \frac{1 + 3\left(\frac{r}{100}\right) + 3\left(\frac{r}{100}\right)^2 + \left(\frac{r}{100}\right)^3 - 1}{\frac{r}{100}}\]
\[\frac{2170}{136
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On a certain sum of money, the total compound interest earned (with in- terest being compounded annually) at the end of 3 years is ₹2,170. Total com- pound interest at the end of 2 years is ₹1,360. Find the sum of money initially invested?
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On a certain sum of money, the total compound interest earned (with in- terest being compounded annually) at the end of 3 years is ₹2,170. Total com- pound interest at the end of 2 years is ₹1,360. Find the sum of money initially invested? for CAT 2024 is part of CAT preparation. The Question and answers have been prepared according to the CAT exam syllabus. Information about On a certain sum of money, the total compound interest earned (with in- terest being compounded annually) at the end of 3 years is ₹2,170. Total com- pound interest at the end of 2 years is ₹1,360. Find the sum of money initially invested? covers all topics & solutions for CAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On a certain sum of money, the total compound interest earned (with in- terest being compounded annually) at the end of 3 years is ₹2,170. Total com- pound interest at the end of 2 years is ₹1,360. Find the sum of money initially invested?.
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