At 10% per annum, the difference between the compound interest (compounded annually) and the simple interest on a sum for 2 years is ₹50. What is the difference for 3 years?

Explanation

1. 01

   3-year difference ÷ 2-year difference = $\frac{P(R/100)^2(3 + R/100)}{P(R/100)^2} = 3 + \frac{R}{100} = 3.1$.

2. 02

   3-year difference = ₹50 × 3.1 = ₹155.

3. 03

   Check: the sum is $50 \div 0.01$ = ₹5,000; CI = ₹1,655, SI = ₹1,500, difference = ₹155.