Multiple choice

The difference between compound interest and simple interest accrued on an amount at the end of three years at the rate of 18% is Rs. 654.5. What is the amount (in Rs.)?

  1. 7163.30

  2. 6733.50

  3. 6352.40

  4. 5654.30

  5. 6339.52
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C Correct answer
Explanation

The difference between CI and SI for 3 years is given by P * (r/100)^2 * (3 + r/100). Plugging in 654.5 = P * (0.18)^2 * (3.18), we get 654.5 = P * 0.0324 * 3.18, which simplifies to P = 654.5 / 0.103032. This results in approximately 6352.40.

AI explanation

Using the formula for the difference between compound interest and simple interest for three years, the difference equals the principal multiplied by the rate squared multiplied by 300 plus the rate, all divided by 1000000. Substituting the given values, 654.5 equals the principal multiplied by 324 multiplied by 318 divided by 1000000. This simplifies to the principal multiplied by 0.103032, so dividing 654.5 by 0.103032 yields the sum of 6352.40.

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