A sum is invested at compound interest payable annually.

A sum is invested at compound interest payable annually. The interest in two successive years was Rs. 500 and Rs. 540. The sum is ?

S.I. on Rs. 500 for 1 year = 540 - 500 = Rs. 40
∴ Rate = (100 x 40)/(500 x 1) = 8%
and Sum = Rs.(100 x 500)/(8 x 1) = Rs. 6250