Question

Simple interest on a certain sum of money for 4 years at 4% per annum exceeds the compound interest on the same sum for 3 years at 5 per cent per annum by Rs. 228. Find the sum.

Answer 1

Let principal (P), R = 4%, T = 4 years

SI = `[ "P" xx 4 xx 4]/100 = "4P"/25`

CI = `"P"[ 1 + 5/100 ] - "P"`

= `"P"|(21/20)^3 - 1|`

= `"P"[9261/8000 - 1]`

= `1261/8000"P"`

Given: SI − CI = Rs. 228

`"4P"/25 - 1261/8000"P"`

`[ 4 xx 320"P" - 1261"P" ]/8000 = 228`

`19"P" = 228 xx 8000`

`"P" = [ 228 xx 8000 ]/19` 

P = Rs. 96000

Thus, Principal = Rs. 96000