Find the principal that should be deposited in bank so that the amount after 2 years is ₹22050 at the rate of interest 5% compounded annually.

Given :

Time t $=$ 2 years

Amount A $=$ Rs. 22050

Rate of interest per annum R $=$ 5%

To find :

We have to find the principal that should be deposited in bank.

Solution :

Let the principal P be Rs.x

Therefore,

Amount $A = P (1+ \frac{R}{100})^t $ 

$22050 = P(1+\frac{5}{100})^2 $ 

$22050 = P(1+0.05)^2$ 

$22050 = P(1.05)^2$

$P = \frac{22050}{1.1025}$

$P = \frac{22050}{11025\times 10^{-4}}$

$P = 2\times10^4$

$P = 2\times10000$

$P = 20000$

Therefore, the principal amount is Rs. 20,000.

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Updated on: 10-Oct-2022

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