If the interest earned during the 2nd year on a certain sum is ₹9911, and the rate of
interest is 10% per annum compounded annually, then the sum is:
-
A.
₹90100
-
B.
₹90080
-
C.
₹90055
-
D.
₹90115
Correct Answer:
A. ₹90100
Explanation:
Let the principal sum be P. The interest for the 1st year is 10% of P, which is 0.1P. The amount after the 1st year becomes P + 0.1P = 1.1P. The interest for the 2nd year is 10% of this new amount, which is 0.1 * 1.1P = 0.11P. Given that the 2nd-year interest is ?9911, we set up the equation 0.11P = 9911. Solving for P, we get P = 9911 / 0.11 = ?90100.
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