# On what principal at the rate of 10% per annum :

On what principal at the rate of 10% per annum, the difference between the compound interest for 3 years and 2 years is Rs.121.00?

- Rs.1,000
- Rs.1,200
- Rs.1,500
- Rs.2,000

**Answer: (1) Rs. 1, 000**

**Solution:-**

Let the principal be Rs.X

**Formula-**

**Compound Interest = P [(1 + R/100) ^{t}**

**– 1]**

**Where, P = principal, R = rate, t = time.**

**If the difference between the compound interest for 3 years and 2 years. **

**Then,**

X {(1 + 10/100)

X [{(11/10)

X [{(1331 – 1000)/1000} – {(121 – 100)/100}] = 121

X (331/100 – 21/100) = 121

X (331 – 210)/1000 = 121

X (121)/1000 = 121

X = 121 x 1000/121

X = 1,000

X {(1 + 10/100)

^{3}– 1} – X {(1 + 10/100)^{2}– 1} = 121.00X [{(11/10)

^{3}– 1} – {(11/10)^{2}– 1} = 121.00X [{(1331 – 1000)/1000} – {(121 – 100)/100}] = 121

X (331/100 – 21/100) = 121

X (331 – 210)/1000 = 121

X (121)/1000 = 121

X = 121 x 1000/121

X = 1,000

**Then principal is Rs.1, 000.**

**Hence, the correct answer is option (1) Rs. 1, 000. **