## Compound Interest

The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Re. 1. The sum (in Rs.) is:

**Options:**

A. | 625 |

B. | 630 |

C. | 640 |

D. | 650 |

**Answer: Option A**

Let the sum be Rs. *x*. Then,

C.I. = \(\left[x\left(1\frac{4}{100}\right)^{2}-x\right] = \left(\frac{676}{925}x-x\right) = \frac{51}{625}x.\)

S.I. = \(\left(\frac{x\times4\times2}{100}\right)= \frac{2x}{25.}\)

So, \(\frac{51x}{625}-\frac{2x}{25}=1\)

x=625.

## Submit Solution