Multiple choice

Raja took a loan of certain amount from a bank. If the difference of compound interest and simple interest on that amount for 3 years at the rate of 5% per annum is Rs. 11.40, then the amount is:

  1. 1495

  2. 2650

  3. 1280

  4. 1560
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

For 3 years at 5%, the difference between compound and simple interest is P[(1.05)³ - 1 - 0.15] = P[1.157625 - 1.15] = 0.007625P. Given this equals Rs. 11.40, we get P = 11.40/0.007625 ≈ Rs. 1495.

Keep practicing — related questions