The difference between the simple and compound rate of interest on a certain sum of money for 2 years at 20% rate of interest is ₹200. The amount is:

Difference = $$P\left(1+\frac{R}{100}\right)^T\ -\ P\ -\ \frac{\left(P\times\ R\times\ T\right)}{100}$$

$$200=P\left[\left(1+\frac{20}{100}\right)^2\ -\ 1\ -\ \frac{20\times\ 2}{100}\right]$$

$$200=P\left[\left(1+\frac{1}{5}\right)^2\ -\ 1\ -\ \frac{2}{5}\right]$$

$$200=P\left[\left(\frac{6}{5}\right)^2\ -\ \frac{7}{5}\right]$$

$$200=P\left[\frac{36}{25}^{ }\ -\ \frac{7}{5}\right]$$

$$200=P\left[\frac{36}{25}^{ }\ -\ \frac{35}{25}\right]$$

$$200=\frac{P}{25}$$

P = ₹5000