The compound interest on a certain sum of money for 2 years at 5% is Rs. 328, then the sum isOptionsRs. 3000Rs. 3200Rs. 3400Rs. 3600

The formula for compound interest is A = P(1 + r/n)^(nt), where:

• A is the amount of money accumulated after n years, including interest.
• P is the principal amount (the initial amount of money).
• r is the annual interest rate (in decimal).
• n is the number of times that interest is compounded per year.
• t is the time the money is invested for in years.

Given that the compound interest accrued over 2 years is Rs. 328 and the annual interest rate is 5% (or 0.05 in decimal form), we can rearrange the formula to solve for P:

328 = P(1 + 0.05/1)^(1*2) - P

Solving this equation will give us the initial sum of money, P.

Let's solve it:

328 = P(1.05)^2 - P 328 = P*1.1025 - P 328 = P(1.1025 - 1) 328 = 0.1025P

So, P = 328 / 0.1025 = Rs. 3200

Therefore, the initial sum of money was Rs. 3200.