The difference between simple and compound interest compounded annually on a certain sum of money for 2 years at 4% per annum is Rs. 80. The sum (in Rs.) is:
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 50,000.
For 2 years, the difference between CI - SI = P(r/100)2
80 = P(4/100)2
80 = P × 1/625
P = Rs 50,000