The difference between the compound interest, when compounded annually, and the simple interest on a certain sum of money for 2 years at 4.2% is ₹8.82. What is the sum?

difference between CI and SI for two years = $$principal\left(\frac{rate}{100}\right)^2$$

The difference between the compound interest, when compounded annually, and the simple interest on a certain sum of money for 2 years at 4.2% is ₹8.82.

$$8.82 = principal\left(\frac{4.2}{100}\right)^2$$

$$8.82=principal\times\frac{17.64}{10000}$$

$$principal=\frac{10000}{2}$$
principal = 5000

So the initial sum = ₹5,000