Question

If the difference between the simple and the compound interests on some principal amount at 20% for 3 years is Rs 48, then the principal amount must be

• A. Rs 650
• B. Rs 600
• C. Rs 375
• D. Rs 400

Answer 1

Answer: (C)

Rs 375

Answer 2

So, the Difference between SI and CI for 3 years = $\frac{Pr^2}{100^2} (3 + \frac{r}{100})$ for 2 years it will be = $\frac{Pr^2}{100^2}$

Rate of interest given in the question r = $20$%

time t = 3 years

Assume the principal amount be $P$

= $P × \frac{20^2}{100^2} (3 + \frac{20}{100}) = 48$

$P × \frac{1}{25} × \frac{16}{5} = 48$

On simplifying = $P = \frac{48 × 125}{16} = 3 × 125$

$P = 375 Rs.$

The correct option is (C):Rs.375