Find the difference between the compound interest (compounded annually) and the simple interest on ₹10,000 at 5% per annum for 2 years.

Explanation

1. 01

   For 2 years, CI − SI = $P\left(\frac{R}{100}\right)^2$.

2. 02

   = $10000 \times \left(\frac{5}{100}\right)^2 = 10000 \times \frac{1}{400} = 25$, so the difference is ₹25.