The difference between the compound interest, when compounded annually, and the simple interest on a certain sum of money for 2 years at 4.2% is ₹8.82. What is the sum?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is Option 3 i.e. ₹5,000
The difference between SI and CI for a certain amount of money at a particular rate of interest = {Principal × Rate2}/1002
⇒ 8.82 = {P × 4.2 × 4.2}/1002
⇒ 88200 = P × 17.64
⇒ Principal = 10000/2 = 5000