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ExamsSSC CGL (Prelims)General

The compound interest on a principal at 20% p.a. for 1.5 years, compounded annually, is ₹3,400. Find the principal.

  1. ₹ 10,625
  2. ₹ 12,000
  3. ₹ 15,000
  4. ₹ 18,150

Correct answer: ₹ 10,625

Solution

With annual compounding for 1.5 years, amount after 1 year is \(1.2P\). For the next half-year, simple interest at 20% p.a. on \(1.2P\) is \(0.1\times1.2P=0.12P\). Total CI is \(0.2P+0.12P=0.32P=3400\), giving \(P=10625\).

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