The principal amount which yields a compound interest of

Home » Aptitude » Compound Interest » Question

The principal amount which yields a compound interest of ₹ 208 in the second year at 4% is

1. ₹ 5000
2. ₹ 10000
3. ₹ 130000
4. ₹ 6500

Correct Option: A

Let the principal be ₹ P.
Amount after first year = (P x 104)/100 and
amount after second year P x (104/100) x (4/100)
According to the question.
(P x 104 x 4)/(100 x 100) = 208
∴ P = ₹ 5000