Question

An amount of Rs. 102500 is invested under compound interest at a rate of 14%. The interest obtained on the sum after a certain time was Rs. 30,709. Find the time the amount was invested for.
1. 2 years
2. 3 years
3. 1 year
4. 4 years

Answer 1

Correct Answer - Option 1 : 2 years

Given:

Amount invested = Rs. 1,02,500

Rate of interest = 14%

Interest obtained = Rs. 30,709

Formula:

Interest after n years under compound interest = P [1 + (r/100)]ⁿ – P

Calculation:

According to the question,

⇒ 102500 [1 + (14/100)]ⁿ – 102500 = 30709

⇒ 102500 [1 + (14/100)]ⁿ = 133209

⇒ (1.14)ⁿ = 133209/102500

⇒ n = 2

∴ The time of investment is 2 years