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If the composed interest on a certain sum for 2 years at 12.5% per annum is Rs. 170 then find the sum.

A.	Rs. 540	B.	Rs. 1360
C.	Rs. 640	D.	Rs. 620

Answer and Explanation

Answer:Rs. 640

Explanation:
Compound interest = A â€“ P = P (1 + R/100)2 â€“ P
= P[ ( 1 + 12.5/100)2 â€“ 1]
∴ 170 â€“ P[(1.125)2 -1)] = P(1.125 + 1)(1.125 â€“ 1)
∴ P = 170/2.125 Ã— 0.125 = Rs. 640

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