# If the difference between the compound interest and simple interest on a sum of 5% rate of interest per annum for three years is Rs. 36.60, then the sum is = ?

A. Rs. 8000

B. Rs. 8400

C. Rs. 4400

D. Rs. 4800

**Answer: Option D **

__Solution(By Examveda Team)__

**Note :**In such type of questions to save your valuable time follow the given below method

Rate % = 5%

Effective Rate of CI for 3 years = 15.7625%

Effective Rate of SI for 3 years = 5 × 3 = 15%

According to the question

$$\eqalign{ & \left( {15.7625 - 15} \right)\% \,{\text{of sum}} {\text{ = Rs. 36}}{\text{.60}} \cr & {\text{0}}{\text{.7625% of sum}} {\text{ = Rs. 36}}{\text{.60}} \cr & {\text{Sum = }}\frac{{36.60}}{{0.7625}} \times 100 \cr & \,\,\,\,\,\,\,\,\,\,\,\, = {\text{Rs. }}4800 \cr} $$

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(105)^3/1000 =15.7625 for effective rate of CI

Difference between CI and SI =[PR×R(300+R)]÷(1000000)

Using this formula we can find the answer

Formula for Effective rate of compound interest ={[(1+(r/n)]^n}-1

= {[1+(5/100×3)]^3}-1

= 15.7625.

How to find the effective rate of CI?