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:
625
630
640
650
Explanation:
Let the sum be Rs. $ x $. Then,
C.I. =$ \left[x\left(1 +\dfrac{4}{100} \right)^2- x\right] $=$ \left(\dfrac{676}{625} x- x\right) $=$ \dfrac{51}{625} x $.
S.I. =$ \left(\dfrac{x \times 4 \times 2}{100} \right) $=$ \dfrac{2x}{25} $.
$\therefore \dfrac{51x}{625} $-$ \dfrac{2x}{25} $= 1
$\Rightarrow x $ = 625.