If the compound interest on a sum for 2 years at 10% per annum is $210, what is the principal?

A $1000

B $500

C $2000

D $1050

✓ Correct Answer: Option A

CI = P[(1+r)^n − 1] = P[(1.1)² − 1] = P(0.21). 210 = 0.21P. P = $1000.

💡 Why is A) the correct answer?

The correct answer to the question "If the compound interest on a sum for 2 years at 10% per annum is $210, what is the principal?" is Option A: $1000.

The other options — B) $500, C) $2000, D) $1050 — are incorrect for this GMAT Exam Prep question. As explained above: CI = P[(1+r)^n − 1] = P[(1.1)² − 1] = P(0.21). 210 = 0.21P. P = $1000.

📚 About This GMAT Exam Prep Practice Question

This 3-level GMAT Exam Prep question from the Quantitative Reasoning topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free GMAT Exam Prep practice test or use flashcards for spaced repetition review.

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If the compound interest on a sum for 2 years at 10% per annum is $210, what is the principal?

✓ Correct Answer: Option A

📚 About This GMAT Exam Prep Practice Question

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