Multiple choice

If difference between simple interest on a certain sum at 4% for 6 years and compound interest on the same sum at 5% for 3 years is Rs. 1647.5. Find the sum.

  1. Rs. 12000

  2. Rs. 15000

  3. Rs. 18000

  4. Rs. 16000

  5. Rs. 20000
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E Correct answer
Explanation

Simple Interest at 4% for 6 years: SI = P×4×6/100 = 0.24P. Compound Interest at 5% for 3 years: CI = P(1.05³-1) = P(1.157625-1) = 0.157625P. Given: 0.24P - 0.157625P = 1647.5, so 0.082375P = 1647.5, P = 1647.5/0.082375 ≈ 20000. The difference formula is key - SI uses simple multiplication, CI uses compound interest factor.

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