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The difference between CI and SI on a certain sum of money at 10% per annum for 3 years is Rs. 620. Find the principal if the interest is compounded annually.

The difference between CI and SI on a certain sum of money at 10% per annum for 3 years is Rs. 620. Find the principal if the interest is compounded annually.
1). Rs. 25000
2). Rs. 15000
3). Rs. 27500
4). Rs. 20000

This Question has 1 answers.

Suppose principal is Rs. P

r = 10%, t = 3 years and [CI – SI] = Rs. 620

⇒ 620 = P[1 + 10/100]3 – P – [P × 10 × 3]/100

⇒ 620 = 1.331P – P – 0.3P

⇒ 0.031P = 620

⇒ P = 20000

∴ Principal = Rs. 20000

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