If the difference between the simple interest and compound interest on some amount at 10% pa for 3 years is 372, then what must be the principal amount?
Answers
Given,
Percentage = 10%
Time = 3 years
SI - CI = rs. 372
For, calculating the principal amount we have to calculate the SI and CI by using variable.
Let,the principal amount = rs. x ( assume x as a variable to perform the further mathematical calculations)
So,
SI = (x × 10 × 3)/100 = rs. 3x/10
Now,
CI for first year = (x × 10 × 1)/100 = rs. x/10
Principal amount of second year = x + x/10 = rs. 11x/10
CI for second year = (11x/10 × 10 × 1)/100 = rs. 11x/100
Principal amount of third year = 11x/10 + 11x/100 = (110x + 11x)/100 = rs. 121x/100
CI for third year = (121x/100 × 10 × 1)/100 = 121x/10 × 1/100 = rs. 121x/1000
So,
SI - CI = 3x/10 - 121x/1000 = (300x-121x)/1000 = 179x/1000
According to the question,
179x/1000 = 372
x = 372000/179
x = 2078.2
Hence,the principal amount is approximately rs. 2078.2