text: # Find the principle
  
  The difference between the compound interest and the simple interest on a certain sum of money at 12% per annum for 2 years is Rs. 1800. Find the principle sum when the interest is compounded annually:
  
  1. Rs.120000
  2. Rs. 125000
  3. Rs. 128000
  4. None of these
  Anurag Mishra Professor Asked on 24th January 2016 in
  • 1 Answer(s)
  
  Answer: (2) Rs. 125000
  
  Explanation:-
  Let the sum be Rs. X
  
  According to question,
  {X (1 + 12/100)^2 – X} – 12 x 2 x X/100 = 1800
  {X (1 + 3/25)^2 – X} – 3 x 2 x X/25 = 1800
  {X (28/25)^2 – X} – 6 X/25 = 1800
  (28 x 28 x X – 25 x 25 X)/25 x 25 – 6 X/25 = 1800
  (784 – 625) X/625 – 6 X/25 = 1800
  (159 X – 150) X/625 = 1800
  9 X = 1800 x 625
  X = 1800 x 625/9
  X = 200 x 625
  X = 125000
  
  Then, sum will be Rs. 125000.
  
  Hence, the correct answer is option (2) Rs. 125000.
  
  Anurag Mishra Professor Answered on 28th January 2016.
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