Given,
Rate = 4%
Time = 2 years
C.I – S.I = Rs.20
Let principal = P
So,
\(={P}[({1}+\frac{4}{100})^2-{1}]-\frac{P \times 4 \times 2}{100}\) = 20
\(=\frac{51p}{625}-\frac{2p}{25}\) = 20
\(=\frac{51p-50p}{625}\) = 20
= p = \({20}\times{625}\) = Es. 12500
Hence,
Principal = Rs. 12500