The compound interest on a certain sum for 3 years at 20% per annum is ₹864. Find the simple interest on the same sum at the same rate and period.
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. ₹712.09
CI for 3 years = P[3r/100 + 3(r/100)2 + (r/100)3]
864 = P[3×20/100 + 3×(20/100)2 + (20/100)3]
864 = P[3×1/5 + 3×1/25 + 1/125]
864 = P[(3/5 + 3/25 + 1/125)]
864 = P[(75 + 15 + 1) / 125]
864 = P[91 / 125]
SI = P × 3×20/100 = P × 3/5
SI = (864 × 125 / 91) × 3/5
SI = 864 × 75 / 91
SI = 712.09