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

The Correct Option is C

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