Question : If the difference between the compound interest and simple interest on a certain sum at the rate of 5% per annum for 2 years is Rs. 20, then the sum is:
Option 1: Rs. 2000
Option 2: Rs. 4000
Option 3: Rs. 6000
Option 4: Rs. 8000
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Correct Answer: Rs. 8000
Solution : Rate, $R = 5$% Term, $n = 2$ years Let the principal be Rs. $P$. CI – SI = Rs. 20 Difference between CI and SI in 2 years = $\frac{PR^2}{10000}$ So, 20 = $\frac{P×5^2}{10000}$ ⇒ $P$ = Rs. 8000 Hence, the correct answer is Rs. 8000.
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