A sum of money at compound interest will amount to 650 at the end of the first year and 676 at the end of the second year. The amount of money is ?->(Show Answer!)

1. A sum of money at compound interest will amount to 650 at the end of the first year and 676 at the end of the second year. The amount of money is

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By: anil on 05 May 2019 01.54 am

let the sum of money be Rs P and Rate of Interest be R% per annum Compounded Amount = P$$(1 + frac{R}{100})^n$$ n - number of time periods Compounded amount after 1 year = P$$(1 + frac{R}{100})^1$$ = 650.............(1) Compounded amount after 2 year = P$$(1 + frac{R}{100})^2$$ = 676.............(2) Dividing both equation 1 and equation 2 $$(1 + frac{R}{100})$$ = 1.04
and from here it can be concluded that R = 4% . Now using equation 1 and value of R P$$(1 + frac{4}{100})^1$$ = 650
P = Rs 625

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