The difference between the compound interest(compounded annually) and simple interest on a sum at the rate of 30% per annum for 2 years is Rs 3600. What is the sum?

Rs 40000

Let the rate of interest = r = 30% (given)

The formula used: (CI - SI) for 2 years = P × \(\frac{r^2}{100^2}\)(r2)1002

Here, Principal = P, CI - SI = 3600

Therefore,

⇒ 3600 = P × \(\frac{30^2}{100^2}\)(r2)1002

⇒ 3600 = P × \(\frac{900}{10000}\)(r2)1002

⇒ P = Rs.40,000