A certain sum will amount to Rs 12100 in 2 years at 10% per annum of compound interest, interest being compounded annually. The sum is = ?

Solution (By Examveda Team)

Given,
Amount = 12,100; r = 10%, t = 2 yrs
$$\eqalign{ & {\text{Amount}} = P{\left[ {1 + \frac{r}{{100}}} \right]^t} \cr & 12100 = P{\left[ {1 + \frac{{10}}{{100}}} \right]^2} \cr & \Rightarrow 12100 = P{\left[ {\frac{{11}}{{10}}} \right]^2} \cr & \Rightarrow 12100 = P \times \frac{{11}}{{10}} \times \frac{{11}}{{10}} \cr & \Rightarrow P = \frac{{12100 \times 10 \times 10}}{{11 \times 11}} \cr & \Rightarrow P = 10000 \cr} $$