## What is the principal amount on which the difference between the compound interest and simple interest is Rs. 40, after two

Question

What is the principal amount on which the difference between the compound interest
and simple interest is Rs. 40, after two years at the rate of annual interest 5%?​

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8 months 2021-10-03T08:34:46+00:00 2 Answers 0 views 0

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Step-by-step explanation:

Here, in this question, the difference is already given to us and we are required to find the principal amount. And using that principal amount we are required to find the amount compounded after three years. The difference is given for two years. So, the formula will be,

Difference = P(R)²/100²

Now, putting the values into the equation, we will find that,

90 = P(12)²/(100)²

90 x 100²/12² = P

P = Rs. 6250

Now, calculating the compound interest on Rs. 6250 will be,

A = 6250(1 + 12/100)³

A = 6250(112/100)³ => 6250(1.12)³ => Rs. 8780.80

So, the compounded amount after three years will be Rs. 8780.80