the amount of a certain principal is ₹ 6655 in 3 years, compounded annually at the rate of 10 p.c.p.a . find the principal.
the amount of a certain principal is ₹ 6655 in 3 years, compounded annually at the rate of 10 p.c.p.a . find the principal.
Answer: We can use the formula for compound interest to solve this problem:
A = P(1 + r/n)^(nt)
where:
A = final amount
P = principal (the amount we’re trying to find)
r = annual interest rate (10% or 0.1 in decimal form)
n = number of times interest is compounded per year (once per year in this case)
t = time in years (3 years in this case)
Plugging in the values, we get:
6655 = P(1 + 0.1/1)^(1*3)
Simplifying the right side of the equation, we get:
6655 = P(1.1)^3
Multiplying 1.1 by itself three times, we get:
6655 = P(1.331)
Dividing both sides by 1.331, we get:
P = 5000
Therefore, the principal is ₹5000.