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
635
645
655

Correct Answer: 625

Explanation:

Let the sum be Rs. x. Then

C.I=x[1+4/100)^2-x]=[626/675x-x]

S.I=x^2/25

C.I-S.I=1

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