If the SI on a sum for $2$ years at $10\%$ p.a. is Rs. $400$, the CI on the same sum for the same period and…

If the SI on a sum for $2$ years at $10\%$ p.a. is Rs. $400$, the CI on the same sum for the same period and rate (compounded annually) is
  1. Rs. $400$
  2. Rs. $410$
  3. Rs. $420$
  4. Rs. $440$

Solution

SI $= 400 \Rightarrow P = \dfrac{400 \times 100}{10 \times 2} = 2000$. CI: $A = 2000 \times (1.10)^{2} = 2420$, so CI $= 420$.

Asked in: IMO

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