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The difference between compound interest and simple interest on a certain sum of money for 2 years at 5% per annum is Rs. 41. What is the sum of money ?

a) Rs. 7200
b) Rs. 9600
c) Rs. 16400
d) Rs. 8400

Answer: c
Explanation:
$$\eqalign{ & {\text{C}}{\text{.I}}{\text{.}} – {\text{S}}{\text{.I}}{\text{.}} = 41 \cr & {\text{C}}{\text{.I}}{\text{.}} – {\text{S}}{\text{.I}}{\text{.}} = P{\left( {\frac{r}{{100}}} \right)^2} \cr & 41 = P\left( {\frac{{25}}{{10000}}} \right) \cr & P = 16400 \cr} $$

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