Two equal sums of money are lent out for 2 years each, one at 5% per annum simple interest and the other at 7% per annum simple interest. If the difference in simple interest earned on the two sums is ₹40, then what was the principal of each sum (in ₹)?
1,000
Difference in simple interest for the same principal P over 2 years at 5% and 7%: \(P \times 2 \times \dfrac{7-5}{100} = 40\).
\(P \times \dfrac{4}{100} = 40 \Rightarrow P = 1000\).
Hence, the principal of each sum is ₹1,000.
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