The principal that yields a compound interest of ₹ 420

The principal that yields a compound interest of ₹
420 during the second year at 5% per annum is

Given that , Compound Interest ( CI ) = ₹ 420 , P = ? , Rate ( R ) = 5%
Let the principal be Rs. P.
According to the question,

1 +

− P

1 +

= 420

100

P		1 +	R		.		1 +	R	− 1		= 420
			100					100

⇒ P		1 +	R		×	R	= 420
			100			100

⇒ P		1 +	5		×	5	= 420
			100			100

⇒ P		1 +	1		= 420 × 20
			20

⇒ P ×	21	= 420 × 20
	20

⇒ P =	420 × 20 × 20	= ₹ 8000
	21