Q.What should be the principal amount so that the compound amount becomes ₹169 in 2 years at a 4% interest rate? (a) ₹ 156.25 (b) ₹160 (c) ₹150.50 (d) ₹ 154.75
Answer: A
Let the principal be \(x\) rupees. \[ \therefore\ x\left(1 + \frac{4}{100}\right)^2 = 169 \] Or, \[ x\left(1 + \frac{1}{25}\right)^2 = 169 \] Or, \[ x\left(\frac{26}{25}\right)^2 = 169 \] Or, \[ x \times \frac{26}{25} \times \frac{26}{25} = 169 \] So, \[ x = 169 \times \frac{25}{26} \times \frac{25}{26} \] Or, \[ x = \frac{625}{4} = 156.25 \] \[ \therefore\ \text{The principal amount will be ₹156.25.} \]
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