Explanation:

To find the sum, we use the formula for the difference between compound and simple interest, which for 2 years is given by $$ (P \cdot r^2) / 100^2 $$ where \( P \) is the principal and \( r \) is the rate. Let's break it down:

- Given Rate: 10% per annum.

- Difference between Compound and Simple Interest: Rs. 874.

The formula becomes:

$$ (P \cdot 10^2) / 100^2 = 874 $$

$$ (P \cdot 100) / 10000 = 874 $$

$$ P = 874 \times 10000 / 100 $$

$$ P = 87,400 $$

- Option 1: Rs. 43,700

- Option 2: Rs. 17,480

- Option 3: Rs. 87,400

- Option 4: Rs. 43,450

Correct Answer: Option 3: Rs. 87,400