The difference between compound interest and simple interest on a certain sum of money for at per annum is . What is the principal sum?
Answer and explanation
Correct answer: A.
- Step 1: For , the difference between CI and SI is given by .
- Step 2: .
- Step 3: .
Answer
.
Why not the others: divides the principal by 2; assumes ; and is an arithmetic overestimate.
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