The different between simple and compound interest. on a certain sum of money for 2years at 4percent per annum,is $1.The sum of money is
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The difference between the simple interset and compound interest on a certain sum of money 'P' for 2 years at r% per annum is given by :
⇒(CI−SI) 2year = Pr^2/100^2
(CI−SI)
2year
Using the above formula for a sum of money 'P' invested for two years at 4% p.a., given that the difference between CI&SI is Rs.20
P(4) 2⇒20=
100×100
P(4×4)⇒5×25×100=P
⇒P=Rs.12500
Hence, the answer is Rs.12500.
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