Ajay invested some money in HDFC at 4% per annum rate of interest. What would be the corresponding simple interest (in ₹) if after 2 years, Ajay got ₹204 as compound interest, considering annual compounding?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is Option 3 i.e. 200 .
CI for 2 years = ₹204
Rate = 4% → Amount factor = (1.04)² = 1.0816
Let principal = P
So, 204 = P × 0.0816 → P = 204 / 0.0816 = ₹2500
SI = (2500 × 4 × 2) / 100 = ₹200