The difference between the compound interest, when compounded annually, and the simple interest on a certain sum of money for 2 years at 4.2% is ₹8.82. What is the sum?

₹5,000

The formula used here is,

Difference in the simple interest and compound interest on a certain sum at R% per annum in 2 years = (CI - SI) = $\frac{PR^2}{100^2}$

⇒ Difference in the simple interest and compound interest on a certain sum at 4.2% per annum in 2 years = Rs. 8.82

⇒ 8.82 = $\frac{P4.2^2}{100^2}$

⇒  8.82  = P x 0.001764

⇒   P   = 5000