Multiple choice

Determine the principal if the difference between the compound and simple interest on a certain sum at $13\%$ per annum for $3$ years is Rs. $600$.

  1. $11363$
  2. $12363$
  3. $13363$
  4. $14363$
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A Correct answer
Explanation

The difference between CI and SI for 3 years is P * (r/100)^2 * (3 + r/100). With r = 13, the formula is 600 = P * (0.13)^2 * (3.13) = P * 0.0169 * 3.13 = P * 0.052897. P = 600 / 0.052897 approximately 11342.7. Option A is the closest value.

AI explanation

Using the formula for the difference between compound and simple interest for three years, the difference is Principal multiplied by Rate multiplied by (300 plus Rate) divided by 1000000. Substituting the given values, 600 equals Principal multiplied by 13 multiplied by 313 divided by 1000000. Solving for the Principal yields 600 multiplied by 1000000 divided by 4069, which is approximately 11363.

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