Correct Option: C

Here , CI = ₹ 55 , SI = ₹ 50
The difference between CI and SI for 2 years period is because CI also includes interest for the second year on the first year’s interest.
CI – SI = ₹ (55 – 50) = ₹ 5

First year’s SI =	50	= ₹ 25
	2

So, ₹ 5 is the interest on ₹ 25 for 1 year.

r =	100 × I
	P × t

Here, I = ₹ 5 , P = ₹ 25 , t = 1 year

∴ r =	100 × 5
	25 × 1

r = 20% per annum.

Now, P =	100 × I
	r × t

Here, SI = ₹ 50 , r = 20% per annum , t = 2 years.

P =	100 × 50
	20 × 2

P = ₹ 125.
Note : Derivation for 2 years problems :
We can find required answer with the help of given formula ,

Rate =	2 × (CI − SI)	× 100
	SI

Sum =	SI × 100
	Rate × 2