Multiple choice

The difference between simple interest (SI) and compounded interest (CI) on a certain sum at 10% per annum for 3 years is Rs. 620. Find the principal if the interest is compounded annually.

  1. 28,000

  2. 25,000

  3. 21,000

  4. 24,000

  5. 20,000
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

Assume that the sum is X; As per SI /simple interest - interest = 3X/10 = 0.3X As per CI/compound interest - interest = X{ - 1} = 0.331X As per the given data, 0.331X - 0.3X = 620 => X = 20,000

So, option 5 is correct.

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