The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Re. 1. The sum (in Rs. ) is_________?
Q1. The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Re. 1. The sum (in Rs. ) is_________?
Answer: 625
Explanation: The difference between CI and SI for 2 years = P × (r/100)² = P × (0.04)² = 1. Solving gives P = Rs. 625.