The difference between compound interest and simple interest on a certain sum for 2 years at 4% is Rs.8. The sum is

Explanation;

Let the principal be Rs.100

N = 2 years; R = 4%

Simple Interest = 100×4×2\100 = Rs.8

Compound Interest A =P(1+r\100)^n

=100(1+4\100)^2

=100×104\100×104\100

= Rs.108.16

Compound Interest = Rs.108.16 – 100 = Rs.8.16

Difference between Compound Interest and Simple Interest

is 8.16 – 8 = Rs. .16

If the difference between Compound and Simple interest is Rs. .16

lf the difference between Compound Interest and Simple is Rs.8,

the principal is 100×8\0.16 = Rs.5000