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The principal sum is Rs.10,000
Step-by-step explanation:
The formula of compound interest is:
where:
- I is the interest
- P is the principal investment amount (the initial deposit or loan amount)
- r is the annual interest rate (decimal)
- n is the number of times that interest is compounded per unit t
- t is the time the money is invested or borrowed for
Jharana got Rs.1881 interest of certain sum for 2 year at 9%
compounded yearly
∵ I = Rs.1881
∵ r = (9/100) = 0.09
∵ n = 1 ⇒ compounded yearly
∵ t = 2 years
Substitute all of these values in the rule above
∴
∴ 1881 = P(1 + 0.09)² - P
∴ 1881 = P(1.09)² - P
∴ 1881 = 1.1881 P - P
∴ 1881 = 0.1881 P
- Divide both sides by 0.1881
∴ P = 10,000
The principal sum is Rs.10,000
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