Multiple choice

The difference between CI and SI for 3 years is rupees 992. If the rate of interest is 10% per annum find the principal?

  1. 22,000

  2. 30000

  3. 28000

  4. 32000
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Using the CI-SI difference formula: D = P[(1 + r/100)^3 - 1 - 3r/100]. For r=10%, P = 992 / [(1.1^3 - 1 - 0.3)] = 992 / 0.031 = Rs. 32,000. This formula works because the difference accumulates as interest on interest. Option D matches this calculation.

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