Arithmetic forms around 50% of the total questions asked in the **Quantitative Aptitude** section of the **CAT exam** and hence needs to be prepared with the utmost focus and attention. Simple Interest/Compound Interest forms a part of the Arithmetic section. The best way to steer yourself in the right direction of **online CAT preparation** is to go through the **CAT previous year paper** and try to solve these questions without looking at the solution. Don't wait for you to finish your preparation to try these questions. Try this SICI question right away!

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Question 8 : For the same principal amount, the compound interest for two years at 5% per annum exceeds the simple interest for three years at 3% per annum by Rs 1125. Then the principal amount in rupees is

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P(1.05)^{2} – P = CI

P × 3 × \\frac{3}{100}) = SI

CI = 0.1025 P

SI = 0.09P

CI – SI = 0.0125P = \\frac{125}{10000}) P = 1125

P = 90000

The question is **"For the same principal amount, the compound interest for two years at 5% per annum exceeds the simple interest for three years at 3% per annum by Rs 1125. Then the principal amount in rupees is" **

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