Multiple choice

If the difference between simple interest and compound interest at 10% p.a rate of interest for 3 years is Rs 1860, then find the principal amount?

  1. 60000

  2. 63000

  3. 66000

  4. 65000

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

For 3 years at 10%, CI-SI difference = P(1.1³ - 1) - P × 0.10 × 3 = P(1.331 - 1 - 0.30) = P(0.031). Given difference is Rs 1860, so P = 1860/0.031 = Rs 60000. Alternatively, use the shortcut formula: Difference for 3 years = P(r/100)² × (3 + r)/100 = P(0.1)² × 3.1 = 0.031P. Either way, P = 60000.

Keep practicing — related questions