Single correct option
A sum of money is invested at 10% per annum. The difference between the compound interest (compounded annually) for 3 years and the simple interest for 3 years on the same sum is ₹620. Find the sum.
- A. ₹18,000
- B. ₹19,000
- C. ₹20,000
- D. ₹21,500
Show answer and solution
Answer: (C) ₹20,000
For 3 years, CI − SI = P[(1+r)³ − 1 − 3r], where r = rate/100. Here (1.1)³ − 1 − 0.3 = 1.331 − 1.3 = 0.031. So 620 = P × 0.031 → P = ₹20,000. (This 3-year version differs from the simpler 2-year CI−SI = P(r/100)² shortcut.)
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