Question

The difference between simple and compound interests compounded annually on a certain sum of money for 3 years at 5% per annum is rs. 40. the sum s:

A) Rs. 1,200
B) Rs. 1,000
C) Rs. 2,000
D) Rs. 800

Answer 1

Compound interest is an interest rate calculation on the principal plus the accumulated interest. The difference between simple and compound interests compounded annually for 3 years at 5% per annum is Rs. 40. The sum is Rs. 1,200. Therefore, the correct option is A) Rs. 1,200

Step-by-step explanation:

Compound interest is an interest rate calculation on the principal plus the accumulated interest. The formula for compound interest can be used to calculate the future amount on a certain sum of money. In this case, the difference between simple and compound interests compounded annually for 3 years at 5% per annum is Rs. 40. By solving the problem, we find that the sum is Rs. 1,200.