If the difference between simple and compound interest on a sum of money for 2 years at 5% p.a is ₹125, the sum (in ₹)is:

50000

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. 125

⇒ 125 = $\frac{P5^2}{100^2}$

⇒  125  = P x \(\frac{1}{400}\)

⇒   P   = 50000