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
Explanation:
Let the Principal be Rs. P.
Simple Interest for 3 years = 3×P×3100=9P100 = 0.09P
Compound Interest for 2 years = P × 1.052 – P = 0.1025P
∴ 0.1025P – 0.09P = 1125
⇒ 0.0125P = 1125
⇒ P = 90,000
Hence, 90000.
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