Question : The difference between CI and SI for 2 years at a 10% rate of interest is Rs. 4. Find the sum of money:
Option 1: Rs. 400
Option 2: Rs. 200
Option 3: Rs. 300
Option 4: Rs. 800
Correct Answer: Rs. 400
Solution :
Given:
The difference between CI and SI for 2 years at a 10% Rate of interest is Rs. 4.
Difference between Compound Interest and Simple Interest for 2 terms = $\frac{PR^{2}}{100^{2}}$, where $R$ is the rate of interest per term and $P$ is principal.
Putting the values in the given formula, we have,
⇒ $4=\frac{P×10×10}{10000}$
⇒ $4=\frac{P}{100}$
⇒ $P=4×100=400$
Hence, the correct answer is Rs. 400.
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