On a certain sum of money, the difference between the compound interest for a year, payable half yearly, and the simple interest for a year is Rs. 56. If the rate of interest in both the cases is 16%, then the sum is ?

A. Rs. 1080

B. Rs. 7805

C. Rs. 8750

D. Rs. 5780

Answer: Option C

Solution(By Examveda Team)

When the money is compounded half yearly the effective rate of interest for 6 months = $$\frac{{16}}{2}$$ = 8% = $$\frac{{2}}{25}$$
Let principal = (25)² = 625

⇒ 4 units → 56
⇒ 1 unit → 14
⇒ Principal = 14 × 625 = Rs. 8750