Step 1

We start with the compound interest formula:

Where:

• A is the total amount of money (including interest) after n years ($3993)
• P is the principal
• r is the interest rate per year (10 ÷ 100 = 0.1)
• n is the loan duration in year (3 years).

Step 2

With A=3993, r=0.1 and n=3, we can substitute these values into the formula as shown:

Step 3

Now we have, 1.331P = 3993. To find P, we need to remove 1.331. To do so, we divide both sides of the equation with 1.331. This is shown below:

Step 4

Finally, we have P = $3000. Clearly, the answer is B.