The difference in simple interest and compound interest on a certain sum of money in 2 years at 3% per annum is 90 paisa. What is the sum?

Rs 1000

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 3% per annum in 2 years = 90paisa or 0.9

⇒ 0.9 = $\frac{P3^2}{100^2}$

⇒  9P  = 0.9 x 10000 

⇒   P   = 1000

Thus, the sum is Rs 1000