A certain Principal amount is invested in the bank at an interest rate of 3% p.a. At the end of a year, the amount becomes Rs. 30,900. Calculate the Principal amount invested initially.
A certain Principal amount is invested in the bank at an interest rate of 3% p.a. At the end of a year, the amount becomes Rs. 30,900. Calculate the Principal amount invested initially.
Correct answer is: Rs. 30,000
Explanation:
In this scenario, someone invested some money in a bank. The bank pays an interest rate of 3% per year. After one year, the total amount in the bank became Rs. 30,900.
We want to find out how much money was initially invested, which is called the principal amount.
To calculate the principal amount, we can use a formula called the compound interest formula. It looks like this:
Principal Amount = Final Amount / (1 + Interest Rate)
Using the given values, we can substitute them into the formula:
\(\text{Principal Amount }= \frac{30,900} { (1 + 0.03)}\)
Simplifying this calculation, we get:
Principal Amount ≈ Rs. 30,000 (rounded to the nearest rupee)
So, the initial principal amount invested was approximately Rs. 30,000.
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