The sum of money that yields a compound interest of ₹

The sum of money that yields a compound interest of ₹ 420 during the second year at 5% p.a is

Here , Compound Interest ( CI ) = ₹ 420 , Rate ( R ) = 5% , Time = 2 years
As we know that ,

CI = P			1 +	R		^T	− 1		−	PR
				100						100

⇒ 420 = P			1 +	5		²	− 1		−	P × 5
				100						100

⇒ 420 = P			21		²	− 1		−	5P
			20						100

⇒ 420 = P		441		− 1		−	5P
		400					100

⇒ 420 = P		441 - 400				−	5P
		400					100

⇒ 420 =	41P	−	5P	=	21P
	400		100		400

⇒ P =	420 × 400	= ₹ 8000
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