Question

If the difference between the simple interest and compound interest on some principal amount at 20% per annum for 3 years is rs. 48, then the principal amount must be

Answer 1

Difference = P(R)²/100²

Now, putting the values into the equation, we will find that,

90 = P(12)²/(100)²

90 x 100²/12² = P

P = Rs. 6250

Now, calculating the compound interest on Rs. 6250 will be,

A = 6250(1 + 12/100)³

A = 6250(112/100)³ => 6250(1.12)³ => Rs. 8780.80

So, the compounded amount after three years will be Rs. 8780.80