• # question_answer The difference between the simple interest (SI) and compound interest (CI) for 2 yr at 4% per annum is Rs 20. The principal will be A)  Rs 11000          B)  Rs 11500 C)  Rs 12500          D)  Rs 12800

Let principal = Rs 3 Then, simple interest $=\frac{x\times 4\times 2}{100}=\frac{2x}{25}$ and compound interest $=\left[ x\times {{\left( 1+\frac{4}{100} \right)}^{2}}-x \right]=\frac{51x}{625}$ $\therefore$ $\frac{51x}{625}-\frac{2x}{25}=20$ $\therefore$ $\frac{51x-50x}{625}=20$ $\Rightarrow$ $\frac{x}{625}=20$ $\therefore$ $x=20\times 625=\text{Rs}\,\,12500$