The difference between simple interest and compound interest on a sum for 3 years at 10\% when the interest is

Question

The difference between simple interest and compound interest on a sum for 3 years at 10\% when the interest is compounded annually is Rs. 155 . Then the principal value is

Accepted Answer

The standard formula for the difference (

D

) between compound interest and simple interest for a period of

3

years is:

D = P \times (\frac{R}{100})^{2} \times (\frac{300 + R}{100})

Given:

*

D = Rs. 155

*

R = 10%

Substitute these values into the formula:

155 = P \times (\frac{10}{100})^{2} \times (\frac{300 + 10}{100})

155 = P \times (\frac{1}{10})^{2} \times (\frac{310}{100})

155 = P \times \frac{1}{100} \times \frac{31}{10}

155 = P \times \frac{31}{1000}

Solving for

P

:

P = \frac{155 \times 1000}{31}

Since

155 = 31 \times 5

:

P = 5 \times 1000 = Rs. 5000

The difference between simple interest and compound interest on a sum for $3$ years at $10%$ when the interest is compounded annually is $Rs. 155$ . Then the principal value is

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The difference between simple interest and compound interest on a sum for 3 years at 10% when the interest is compounded annually is Rs. 155. Then the principal value is