Correct Answer - Option 4 : Rs. 10000

Let the principal be P.

Rate = R = 10% per annum, Time = n = 3 years

Simple Interest = (P × N × R)/100

When interest is compounded annually:

Amount = P[1 + (R/100)]^{n}

Given,

⇒ CI – SI = 310

Then,

⇒ SI = (P × 10 × 3)/100

⇒ SI = 0.3P

⇒ CI = P[1 + (10/100)]^{3} – P

⇒ CI = P(1.1)^{3} – P

⇒ CI = 0.331P

⇒ 310 = 0.331P – 0.3P

⇒ P = Rs. 10000

⇒ SI for 5 years at 20% per annum = (10000 × 5 × 20)/100

⇒ SI = 10000

Simple Interest is Rs. 10000.