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The difference between the compound inte...

The difference between the compound interest and simple interest. on a certain sum at 3% per annum for 3 years is Rs. 27.27. The sum is :

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To find the sum (P) for which the difference between the compound interest (CI) and simple interest (SI) at a rate of 3% per annum for 3 years is Rs. 27.27, we can follow these steps: ### Step 1: Define the Variables Let the principal amount (sum) be \( P \). The rate of interest \( R = 3\% \). The time period \( T = 3 \) years. ### Step 2: Calculate Simple Interest (SI) The formula for Simple Interest is: \[ SI = \frac{P \times R \times T}{100} \] Substituting the values: \[ SI = \frac{P \times 3 \times 3}{100} = \frac{9P}{100} \] ### Step 3: Calculate Compound Interest (CI) To find the Compound Interest for 3 years at 3%, we first need to determine the effective rate. The formula for the effective rate over multiple years is: \[ \text{Effective Rate} = A + B + C + \frac{A \times B + B \times C + C \times A}{100} + \frac{A \times B \times C}{100} \] Here, \( A = B = C = 3\% \): \[ \text{Effective Rate} = 3 + 3 + 3 + \frac{3 \times 3 + 3 \times 3 + 3 \times 3}{100} + \frac{3 \times 3 \times 3}{100} \] Calculating: \[ = 9 + \frac{9 + 9 + 9}{100} + \frac{27}{100} = 9 + \frac{27}{100} + \frac{27}{100} = 9 + 0.27 = 9.27\% \] Now, we can calculate the Compound Interest using the effective rate: \[ CI = \frac{\text{Effective Rate} \times P}{100} = \frac{9.27P}{100} \] ### Step 4: Set Up the Equation According to the problem, the difference between CI and SI is Rs. 27.27: \[ CI - SI = 27.27 \] Substituting the values we calculated: \[ \frac{9.27P}{100} - \frac{9P}{100} = 27.27 \] This simplifies to: \[ \frac{(9.27 - 9)P}{100} = 27.27 \] \[ \frac{0.27P}{100} = 27.27 \] ### Step 5: Solve for P Multiply both sides by 100: \[ 0.27P = 2727 \] Now, divide both sides by 0.27: \[ P = \frac{2727}{0.27} = 10000 \] ### Final Answer The sum \( P \) is Rs. 10,000. ---
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