The difference between the compound interest (compounded annually) and simple interest on a sum of money for two years at 11% per annum is ₹242. Find the sum.

Correct option is C

Given:

Rate of interest per annum = 11%

Time = 2 years

Difference between CI and SI for 2 years = ₹242

Formula Used:

Difference between CI and SI for 2 years = Principal × $$\left( \frac{\text{Rate}}{100}\right)^2$$​​

Solution:

Let the sum be P.

Difference = P × $$\frac{11}{100}$$​ × $$\frac{11}{100}$$​​

242 = P × 0.11 × 0.11

242 = P × 0.0121

P = 242 ÷ 0.0121

P = 20,000

Thus, the sum is ₹20,000.