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.

  1. Step 1: For , the difference between CI and SI is given by .
  2. Step 2: .
  3. Step 3: .
Answer
.
Why not the others: divides the principal by 2; assumes ; and is an arithmetic overestimate.

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