If the difference between the compound interest, compounding annually and the simple interest on a certain sum of money at 5% per annum for 3 years is Rs.183, then what is the sum of money invested?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. Rs.24,000.
Formula used:
Difference between SI and CI for 3 years = 3 × PR2/1002 + P(R/100)3
Calculations:
Using the above formula;
⇒ 183 = 3 × P × 52/1002 + P(5/100)3
⇒ 183 = 3P/400 + P/8000
⇒ 183 = (60P + P)/8000
⇒ 61P = 183 × 8000
⇒ P = 24000