Explanation:

To solve this problem, we apply the formulas for compound and simple interest:

- Simple Interest (SI) Formula:

\( \text{SI} = \frac{P \times R \times T}{100} \)

For 2 years at 25%, SI = \( \frac{P \times 25 \times 2}{100} = 0.5P \).

- Compound Interest (CI) Formula:

\( \text{CI} = P \times \left(1 + \frac{R}{100}\right)^T - P \)

For 2 years at 25%, CI = \( P \times \left(1.25^2\right) - P \).

- Difference:

CI - SI = Rs. 25. Find \( P \):

\( 0.5625P - 0.5P = 25 \)

\( 0.0625P = 25 \)

\( P = 400 \).

- Ratio of CI to SI:

Ratio = \( \frac{0.5625P}{0.5P} = \frac{9}{8} \).

- Options:

1. Option 1: Principal = 400, Ratio = 9/8

2. Option 2: Principal = 200, Ratio = 9/8

3. Option 3: Principal = 400, Ratio = 11/10

4. Option 4: Principal = 200, Ratio = 11/10

5. Option 5: None of these

Correct Answer: Option 1: 400, 9/8