The difference between simple interest and compound interest on a sum of money for 1 year at 4% per 6 months is Rs.4. Find the sum?

Rs.2500

Rate of Interest = 4% = \(\frac{1}{25}\)

Let Principal = Rs.625   (square of denominator i.e. 25)

Now,

Alternate:

4% = \(\frac{1}{25}\) = \(\frac{1^2 ⇒ Diff.}{25^2 ⇒ Principal}\)

Here,

Difference = 1R = Rs.4 (given)

Therefore,

Principal = 25² × 4 = 625 × 4 = Rs.2500