A certain sum of money becomes Rs.28800 in 2 years at 20% per annum compound interest, compounded annually. The sum of money is:

ARs.24000

BRs.22000

CRs.21000

DRs.20000 ✓ Correct

Correct answer: (D) Rs.20000

Explanation

The sum of money is Rs.20000.

Under annual compounding, Amount = P (1 + R/100)^n.

Here 28800 = P (1 + 20/100)^2 = P (1.2)^2.

(1.2)^2 = 1.44, so 28800 = 1.44 P.

P = 28800 / 1.44 = 20000.

This is the compound interest amount formula.

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