Question

5. If the difference between simple interest and compound interest on a certain
sum of money for 3 years at 10% per annum is 31, the sum is
(a) *500
(b) 750
1000 (d) 1250
​

Answer 1

Answer:

Let P be the principal.

Value including interest after 36 months at simple interest:

P+ (P X 3x 10/100)

P(1+ 30/100),= P X 130/100. (1)

Compound interest:

=P X 110/100 X 110/100 X 110/100,

=P X 1331/1000. (2)

The difference in interest is 31.

Hence (2) - (1) = 31.

i.e. P X 1331/1000 - P X 1300/1000 = 31

P X 31/1000 = 31.

P = 1000.

Hence the answer is 1000.