Question

A sum of money borrowed for 3 years at 10 percent per annum. The difference between simple interest and compound interest ( compounded annually) is rs.1240 . find the sum borrowed.

step by step explanations please

right answer according to the answer sheet is rs.40000.​

Answer 1

Answer:

P = 40,000

Step-by-step explanation:

Given:

Principle = p

Rate = 10% p.a.

Time = 3 yrs

Difference between Compound interest and Simple interest is 1,240

$P[(1+i)^n-1] - Pit = 1,240$

$P[(1+0.1)^3-1] - 0.3p = 1,240$

$P[(1.1)^3-1] - 0.3p = 1,240$

$(1.1)^3-1] = 0.331$

$0.331p - 0.3p = 1,240$

$0.031p = 1,240$

$P = 1,240/0.031$

P = 40,000