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21 March, 00:34

The difference between the simple and compound interest for a certain sum of money of 3 years at 5% per annum is Rs. 61.0. Find the sum

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  1. 21 March, 00:35
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    5% interest compounded annually for 3 years multiplies the initial balance by

    ... 1.05^3 = 1.157625

    5% simple interest for 3 years multiplies the initial balance by 1 + 3*0.05 = 1.15.

    The difference of these multipliers is

    ... 1.157625 - 1.15 = 0.007625

    If the difference in account balance is Rs 61.00, then the invested principal amount P is

    ... P*0.007625 = 61.00

    , ... P = 61.00/0.007625 = 8000.00

    The sum of money is Rs 8000.
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