# what Principal will the Compound Interest for 3 Years :

On what principal will the compound interest for 3 years at 5% per annum compound annually is ₹ 63.05?

- ₹ 400
- ₹ 600
- ₹ 300
- ₹ 800

**Answer: (1) Rs.400**

**Explanation:- **Let the principal be Rs. X

**Given-**

Time = 3 years, Rate = 5% & Compound Interest = Rs. 63.05

**Formula-**

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

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

63.05 = P{(1 + 5/100)^{3} – 1}

63.05 = P {(1 + 1/20)^{3} – 1}

63.05 = P {(21/20)^{3} – 1}

63.05 = P {21 x 21 x 21/20 x 20 x 20 – 1}

63.05 = P{9261/8000 – 1}

63.05 = P (9261 – 8000)/8000

63.05 = 1261 P/8000

P = 63.05 x 8000/1261

P = 6305 x 80/1261

P = 504400/1261

P = Rs. 400

Then, the principal is Rs. 400.

Hence, the answer is (1) Rs. 400.