The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Rs. 80. The sum (in Rs.) is: 

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SSC GD Constable (2022) Official Paper (Held On : 13 Jan 2023 Shift 1)
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  1. 50,000
  2. 45,000 
  3. 60,000
  4. 70,000

Answer (Detailed Solution Below)

Option 1 : 50,000
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Detailed Solution

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Given Data:

Simple Interest and Compound Interest difference = Rs. 80

Time period = 2 years

Interest rate = 4% per annum

Concept:

The difference between compound interest and simple interest for 2 years can be found using the formula: CI - SI = P × (r/100)2, where P is the principal amount, r is the rate of

interest, CI is the Compound Interest, and SI is the Simple Interest.

Calculation:

Using the formula, P × (r/100)2 = CI - SI

⇒ Substitute the given values into the formula, P × (4/100)2 = 80

Solving for P,

⇒ P = 80/(4/100)2 = Rs. 50000  

Therefore, the sum is Rs. 50000.

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