The difference between compound interest, compounded annually, and simple interest on a certain sum at 10% per annum for 2 years is Rs. 1,060. Find the sum (in Rs.).

Correct option is A

Given:

Rate of Interest, R = 10% per annum

Time, T = 2 years

Difference between CI and SI = ₹1,060

Need: Principal, P

Formula Used:

Difference between CI and SI for 2 years = $$P \times \left(\frac{R}{100}\right)^2$$​​

​Solution:​

For R = 10%:

$$\left(\frac{10}{100}\right)^2 = \frac{1}{100}$$​ = 1%

Using formula;

1060 = P × $$\frac{1}{100}$$​​

P = 1060 × 100

P = ₹106000