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The difference between the amounts of compound interest and simple interest on the same amount invested at the same rate for 2 years in Rs. 32. If the interest rate is 4% per annum, calculate the amount invested.(in Rs.)

Solution

✅ Correct Option: 2

For 2 years, the difference between CI and SI is P(r/100)2P(r/100)^2.

32=P(4/100)2=P(0.0016)32 = P(4/100)^2 = P(0.0016)

P=32/0.0016=20000P = 32/0.0016 = 20000.

So the principal invested is Rs. 20,000.

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