Question

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

• A. Rs. 550
• B. Rs. 500
• C. Rs. 375
• D. Rs. 400

Answer 1

The correct option is C Rs. 375

Here P = ?, R = 20%, T = 3 years
Difference Rs. 48

$48=P{[1+\frac{R}{100}]}^T-P-\frac{PRT}{100}$

$48=P[{(1+\frac{20}{100})}^3-1-\frac{20\times 3}{100}]$

On solving P = 375.