Question

A certain amount is lent out on CI for 3 years, at 15% per annum. The difference between the compound interest and simple interest received is Rs 1701. Find the Principal which was lent out on interest?

1. Rs. 32,000
2. Rs. 8,000
3. Rs. 24,000
4. Rs. 16,000

Answer 1

Correct Answer - Option 3 : Rs. 24,000

Given: 

Difference b/w CI – SI = Rs 1701,

Amount lent out on CI for 3 years at 15% per annum.

Formula used:

CI = P [1+(R/100)]ⁿ - P

Calculation:

Let the principal be 8000P

So, CI for 3 years = [8000P × (1+ 15/100)³ - 8000 P]

⇒ CI for 3 years = 4167P

SI for 3 years = 8000P × 15 × 3/100

⇒ SI for 3 years

Difference = 4167P - 3600P = 567P

ATQ, 567P = 1701

⇒ P = 3

So, Principal = 8000P

⇒ 8000 × 3 = 24000

∴ The principal is Rs. 24,000