What is the principal amount if the difference between the compound interest (compounded yearly) and simple interest on it for 2 years at an annual rate of 10% is Rs 65?

Explanation

Let the principal be Rs x. The difference between compound interest and simple interest for 2 years at 10% per annum is given by: (x × (1 + 0.10)^2 - x) - (x × 0.10 × 2) = 65. Simplifying: (x × 1.21 - x) - 0.20x = 65 → (0.21x - 0.20x) = 65 → 0.01x = 65 → x = 6500. Hence, the principal amount is Rs 6500.