The difference between simple and compound interest for the fourth year is Rs. 7280 at 20% p.a. What is the principal sum?

Answer: Option B

Difference between Compound interest and Simple interest for the fourth year is Rs. 7280
$$\begin{array}{rl}& P{\left(\frac{6}{5}\right)}^3\left(\frac{1}{5}\right)-\frac{P}{5}=7280\\ & \frac{P}{5}\left[{\left(\frac{6}{5}\right)}^3-1\right]=7280\\ & \frac{P}{5}\left[\frac{216}{125}-1\right]=7280\\ & \frac{P}{5}\times \frac{91}{125}=7280\\ & \therefore P=50000\end{array}$$