Answer & Solution
Answer: Option A
Solution:
$$\eqalign{
& {\text{The}}\,{\text{difference}}\,{\text{between}}\,{\text{compound}}\,{\text{interest}}\,{\text{and}} \cr
& {\text{simple}}\,{\text{interest}}\,{\text{over}}\,{\text{two}}\,{\text{years}}\,{\text{is}}\,{\text{given}}\,{\text{by}} \cr
& \frac{{{{\Pr }^2}}}{{{{100}^2}}}\,or\,P{\left( {\frac{r}{{100}}} \right)^2} \cr
& {\text{Here,}}\,{\text{Principal}}\,\left( P \right) = Rs.\,2000 \cr
& {\text{Rate}}\,\left( r \right) = 5\% \cr
& {\text{Now}}\,{\text{difference}}, \cr
& D = \frac{{\left( {2000 \times 5 \times 5} \right)}}{{\left( {100 \times 100} \right)}} \cr
& D = Rs.\,5 \cr} $$
