SOLUTION: the difference between compound interest and simple interest for 3years at 20%is48 find the sum

Algebra ->  Customizable Word Problem Solvers  -> Finance -> SOLUTION: the difference between compound interest and simple interest for 3years at 20%is48 find the sum      Log On

Ad: Over 600 Algebra Word Problems at edhelper.com


    

Question 869349: the difference between compound interest and simple interest for 3years at 20%is48 find the sum
Answer by mananth(16946) About Me  (Show Source):
You can put this solution on YOUR website!
Simple Interest = p*r*n
SI = p*0.2*3
SI=0.6p
compound Interest
A=P(1+r)^nt
A=P(1.2)^3
Interest = A-P
Compound Interest=(p(1.2)^3-P)
compound interest - simple interest =48
p(1.2)^3-p-0.6p=48
p(1.2)^3-1.6p=48
p((1.2)^3-1.6)=48
p=48/((1.2)^3-1.6)
p=375
Check
375*0.2*3=225
compound interest on 375 is 278
278-225=48