Question : The difference between compound interest and simple interest on Rs. $x$ at 25% per annum for 2 years is Rs. 325. Find the value of $x$.
Option 1: Rs. 5200
Option 2: Rs. 4000
Option 3: Rs. 5300
Option 4: Rs. 2400
Correct Answer: Rs. 5200
Solution :
Given: Principal, $P$ = Rs. $x$
Rate, $r$ = 25%
Time = 2 years
Difference between simple interest and compound interest $=P(\frac{r}{100})^2$
⇒ $325 = x(\frac{25}{100})^2$
⇒ $325=\frac{x}{16}$
$\therefore x=5200$
Hence, the correct answer is Rs. 5200.
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