If the difference between compound and simple interest on a certain sum of money for 3 years at 10% per annum is ₹310, what is the sum?
Question
If the difference between compound and simple interest on a certain sum of money for 3 years at 10% per annum is ₹310, what is the sum?
Solution
Sure, let's solve this step by step.
Step 1: Understand the formula The difference between compound interest and simple interest for 3 years is given by the formula: P*(r/100)^2, where P is the principal amount and r is the rate of interest.
Step 2: Substitute the given values In this case, the difference is given as ₹310 and the rate of interest is 10%. So, we substitute these values in the formula: 310 = P*(10/100)^2
Step 3: Simplify the equation 310 = P*(1/100) So, P = 31000
Therefore, the sum of money is ₹31000.
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