The difference between the compound interest and the simple interest on a certain sum of money at 10% per annum for 2 years is ₹200. What is the sum of money, if in the case of compound interest, interest is compounded annually?

₹20,000

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 10% per annum in 2 years = Rs. 200

⇒ 200 = $\frac{P10^2}{100^2}$

⇒   P   = 20000