Recover the principal from two CI snapshots 3 years apart: A sum becomes ₹ 6690 after 3 years and ₹ 10035 after 6 years at compound interest (same annual rate). What is the original principal (sum)?

Difficulty: Easy

Correct Answer: ₹ 4460

Explanation:


Introduction / Context:
Knowing amounts at two times that are exactly 3 years apart lets us find (1 + r)^3 from their ratio. Dividing the earlier amount by this factor gives the principal directly, avoiding separate rate computation.



Given Data / Assumptions:

  • A(3 years) = ₹ 6690
  • A(6 years) = ₹ 10035
  • Annual compounding at fixed r


Concept / Approach:
A(6)/A(3) = (1 + r)^3. Therefore (1 + r)^3 = 10035/6690 = 1.5. Hence the principal P = A(3) / (1 + r)^3 = A(3) / 1.5.



Step-by-Step Solution:
(1 + r)^3 = 10035 / 6690 = 1.5P = 6690 / 1.5 = ₹ 4460



Verification / Alternative check:
If P = 4460, then A(3) = 4460 * 1.5 = 6690 (given), and A(6) = 6690 * 1.5 = 10035 (consistent).



Why Other Options Are Wrong:
₹ 4400, ₹ 4445, or ₹ 4520 do not maintain the exact 1.5 growth from year 3 to year 6 when multiplied by (1 + r)^3.



Common Pitfalls:
Trying to compute r via cube root first; while valid, it is unnecessary when the question only asks for the principal.



Final Answer:
₹ 4460

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