The difference between simple and compound interest compounded

The difference between simple and compound interest compounded annually, on a certain sum of money for 2 years at 4% per annum is ₹ 1. The sum (in ₹) is :

Here , Difference = C.I. - S.I. = ₹ 1 , Time = 2 years , Rate = 4%
The difference between compound interest and simple interest for two years

C.I. - S.I. =	Principal × (Rate)²
	100 × 100

∴ 1 =	Principal × (4)²
	10000

⇒ Principal =	10000	= ₹ 625
	16