On what sum of money will the difference between C.I and SI for 2 years at 5% per annum be equal to 25?

On what sum of money will the difference between the compound interest and simple interest for 2 years be equal to Rs. 25 if the rate of interest charged for both is 5% p.a.?

C.I = `P[(1 + r/100)^2 - 1] = P[(1 + 5/100)^2 - 1] = "41P"/400`

`S.I = (P xx 5 xx 2)/100 = P/100`

Given, C.I. - S.I. Rs. 25

`=> "41P"/400 - P/10 = 25`

`=> (41P - 40P)/400 = 25`

`=> P = 10000`

∴ Required sum  = Rs. 10,000

Concept: Concept of Compound Interest - Compound Interest as a Repeated Simple Interest Computation with a Growing Principal

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