The difference between the simple interest and compound interest on a principal at the rate 5% per annum for 2 years is ₹25. What is the principal?

₹10000

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 5% per annum in 2 years = Rs. 25

⇒ 25 = $\frac{P5^2}{100^2}$

⇒  25  = P x \(\frac{1}{400}\)

⇒   P   = 10000