Question

The difference between simple and compound interest for the forth year is rs.7280 at 20% per annum. What is the principal sum.

Answer 1

Answer:

Given.

R = 20%

difference between CI and SI  = 7280

Difference between C.I and S.I for nth year,

= (Pr /100) × [(1 +(r /100)) n-1 -1]

→ 7280 = (20P/100) × [(1.2)3-1]

→ P = 50000.

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@GauravSaxena

Answer 2

The difference between simple and compound interest for the forth year is Rs.7280 at 20% per annum. Then The principal sum is Rs 50000

Solution:

The formula for difference between simple and compound interest for nth year is:

$Difference = \frac{p \times r }{100} \times [( \frac{100+r}{100})^{n-1} - 1 ]$

Where,

p is the principal

r is rate of interest

n is number of years

From given,

Difference = 7280

r = 20

n = 4 year

p = ?

Substituting the values we get,

$7280 = \frac{p \times 20 }{100} \times [( \frac{100+20}{100})^{4-1} - 1 ] \\\\36400 = p \times [ 1.728-1]\\\\36400 = p \times 0.728\\\\p = \frac{36400}{0.728}\\\\p = 50000$

Thus the principal sum is Rs 50000

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