The difference between the compound interest (compounded annually) and the simple interest on a sum of Rs. 1000 at a certain rate of interest for 2 years is Rs. 10. The rate of interest per annum is :

Explanation:

Note:In such type of questions use given below formula,when 2 years CI and SI difference is given.

Principal=Difference×100^2\R^2

where=R= Rate %

Principal =Rs.1000,

Time=2 years

Difference=Rs.10

Put the value in formula,

1000=10×100^2\R^2

1000=100000\R^2=R=10%