The difference between the compound interest and the simple interest on a certain sum of money at 10% per annum for 2 years is ₹ 200. What is the sum of money, if in the case of compound interest, interest is compounded annually?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. ₹ 20,000
Formula used:
D = PR2/1002 ---- (1)
Where D = difference, P = principal, R = rate
Calculations:
Using equation (1), we get
⇒ 200 = (P × 100)/10000
⇒ P = ₹ 20,000