The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Re. 1. The sum (in Rs.) is:

1.

The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Re. 1. The sum (in Rs.) is:

[A].	625
[B].	630
[C].	640
[D].	650

Answer: Option A

Explanation:

Let the sum be Rs. x. Then,

C.I. =		x		1 +	4		2	- x		=		676	x	- x		=	51	x.
					100							625					625

S.I. =		x x 4 x 2		=	2x	.
		100			25

	51x	-	2x	= 1
	625		25

x = 625.

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