"The difference between the CI and the SI on a sum of money lent for 2 years at 20% interest per annum is ₹ 80. The sum is:"
Answer & explanation
Correct answer: option 2
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 20% per annum in 2 years = Rs. 80
⇒ 80 = $\frac{P20^2}{100^2}$
⇒ 80 = P x \(\frac{1}{25}\)
⇒ P = 2000