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Examoogle • User • info@examoogle.com • EE-2024-8821
Chapter 1 of 12 • Page 1 of 248🔒 Protected PDF • Watermarked
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If the interest earned during the 2nd year on a certain sum is ₹4719, and the rate of interest is 10% per annum compounded annually, then the sum is:
₹42045
₹42900
₹41905
₹42445
₹42900
At 10%, the interest in 2nd year is 11% of principal P. So, 0.11×P=4719⟹P=0.114719=42900.
Interest earned during the 2nd year = ₹4719, Rate of interest R=10% per annum, Compounded annually.
CI2nd year=P×100R×(1+100R)
At 10%, the interest in 2nd year is 11% of principal P. So, 0.11×P=4719⟹P=0.114719=42900.
Confusing the 2-year total compound interest (21% of P) with the 2nd year's specific interest (11% of P).
Understand the Rate and Interest Multiplier
For a principal P at 10% per annum compound interest, the interest for the 1st year is 10% of P. In the 2nd year, interest is earned on both the principal and the 1st year's interest, which equals 10%+1%=11% of P.
Interest Rate in 2nd Year=10%+(10%×10%)=11%
Set up the Equation for 2nd Year Interest
We are given that the interest earned in the 2nd year is ₹4719. Therefore, 11% of the Principal P equals ₹4719.
11%×P=4719
Calculate the Principal Sum
Solving for P by dividing ₹4719 by 11%:
P=114719×100=42900
Verify Option
The calculated sum is ₹42900, which matches Option B.
P=₹42900
B is correct because the interest earned specifically in the 2nd year at 10% compound interest corresponds to 11% of the principal sum, yielding P=0.114719=₹42900.
For multi-year compound interest problems at R%, express each year's individual interest contribution directly using fractional multipliers to avoid multi-step calculations.
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