cat 2020 Question 8

Question

For the same principal amount, the compound interest for two years at 5% per annum exceeds the simple interest for three years at 3% per annum by Rs 1125. Then the principal amount in rupees is

Accepted Answer

For two years the compound interest is

$\frac{PR(1)}{100} + \frac{PR(1)}{100}\left(1 + \frac{PR(1)}{100}\right)$

For three years the simple interest is

$\frac{9PR}{100}$

Now R(1)= 5% and R = 3%

Hence

$\frac{5P}{100} + \frac{5P}{100}(1.05) - \frac{9P}{100} = 1125$

$-\frac{4P}{100} + \frac{5.25P}{100} = 1125$

$\frac{1.25P}{100} = 1125$

Solving we get P = 90000

Question 8.

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Question 8.

Question Explanation

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