When difference between compound and simple interest for three years is ₹244 at 5% interest per annum, the principal is ₹______
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 32000.
Difference (CI − SI) for 3 years = P × (R/100)2 × (3 + R/100)
⇒ 244 = P × (5/100)2 × (3 + 5/100)
⇒ 244 = P × 25/10000 × (3 + 0.05)
⇒ 244 = P × 25/10000 × 3.05
So:
⇒ 244 = P × 0.007625
P = 244/0.007625 = 32000