The difference between the simple interest on a certain sum at the rate off 10% per annum for 2 years and compound interest which is compounded every 6 months is Rs. 124.05. What is the principal sum?	Pick one:
A) Rs. 6000
B) Rs. 8000
C) Rs. 12000
D) Rs. 10000
E) Rs. 5000
Explanation:   Let the sum be P   Compound Interest on P at 10% for 2 years when interest is compounded half-yearly   =P(1+(R/2)/100)2T − P = P(1+(10/2)/100)2×2 − P = P(1+1/20)4 − P = P(21/20)4 − P   Simple Interest on P at 10% for 2 years = PRT/100 = (P × 10 × 2)/100 = P/5   Given that difference between compound interest and simple interest = 124.05   =&gt; P(21/20)4 − P − P/5 = 124.05   =&gt; P[(21/20)4 − 1 − 15] = 124.05   =&gt; P[(194481 − 160000 − 32000)/160000] = 124.05   =&gt; P[2481/160000] = 124.05   =&gt; P = (124.05 × 160000)/2481 = 160000/20= 
<gadget id="calculator">160000/20</gadget>
<output>8_000</output>
8000   Answer: Option Rs. 8000
<result>B</result>
The difference between the simple interest on a certain sum at the rate off 10% per annum for 2 years and compound interest which is compounded every 6 months is Rs. 124.05. What is the principal sum?