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(B) The formula for the difference between compound interest and simple interest for $2$ years is given by: $	ext{Difference} = P 	imes \left(\frac{

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$20$

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(B) The formula for the difference between compound interest and simple interest for $2$ years is given by: $	ext{Difference} = P 	imes \left(\frac{r}{100}ight)^2$. Here,the principal $P = ₹ 12500$ and the rate $r = 4 \%$. Substituting the values: $	ext{Difference} = 12500 	imes \left(\frac{4}{100}ight)^2$ $	ext{Difference} = 12500 	imes \left(\frac{1}{25}ight)^2$ $	ext{Difference} = 12500 	imes \frac{1}{625}$ $	ext{Difference} = 20$. Thus,the difference between the simple interest and the compound interest is ₹ $20$.

An amount of ₹ $12500$ is deposited for a period of $2$ years at an interest rate of $4 \%$ per annum. Find the difference between the simple interest and the compound interest (in ₹) for the deposit.

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