Solution:
According to the question,
Time (T) = 2 years
Rate of interest (R%) = 8% per annum
Difference between compound interest and simple interest (CI - SI) = Rs 76.80
Let the principal sum be represented by Rs P.
We have,
CI = $P \left [ \left ( 1 + \dfrac{R}{100} \right )^T - 1 \right ]$
$= P \left [ \left ( 1 + \dfrac{8}{100} \right )^2 - 1 \right ]$
$= P \left [ \left ( \dfrac{108}{100} \right )^2 - 1]$
$= P \left [ \left ( \dfrac{27}{25} \right )^2 - 1 \right ]$
$= P \left [ \dfrac{729}{625} - 1 \right ]$
$= P × \dfrac{729 - 625}{625}$
$= P × \dfrac{104}{625}$
$or, CI = \dfrac{104 P }{625}$
And,
SI = $\dfrac{P × T × R}{100}$
$= \dfrac{P × 2 × 8}{100}$
$or, SI = \dfrac{4P}{25}$
We know,
$CI - SI = 76.80$
$or, \dfrac{104P}{625} - \dfrac{4P}{25} = 76.80$
$or, \dfrac{104P - 4×25 P}{625} = 76.80$
$or, \dfrac{104 P - 100 P}{625} = 76.80$
$or, 4P = 76.80 × 625$
$or, 4P = 48000$
$or, 4 × P = 4 × 12000$
$\therefore P = Rs 12,000$
Hence, the required principal amount is Rs 12,000.
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