Multiple choice

On what sum will the difference between simple and compound interest for 3 years at 5% p.a. amount to Rs. 12.20?

  1. Rs. 1200

  2. Rs. 1500

  3. Rs. 1600

  4. Rs. 2000

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The difference between CI and SI for 3 years is P * (r/100)^2 * (3 + r/100). Given 12.20 = P * (0.05)^2 * (3.05). 12.20 = P * 0.0025 * 3.05 = P * 0.007625. P = 12.20 / 0.007625 = 1600.

AI explanation

The formula for the difference between compound interest and simple interest for three years is P * R^2 * (3 + R) / 100^3. Substituting the given values, the difference is P * 25 * 305 / 1000000, which simplifies to P * 7625 / 1000000. Setting this equal to 12.20 gives P equals (12.20 * 1000000) / 7625, which resolves to a sum of Rs. 1600.

Keep practicing — related questions