Govind invested some money in HDFC at 3% per annum rate of interest. What would be the corresponding simple interest (in ₹) if after 2 years, Govind got ₹203 as compound interest, considering annual compounding?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 200.
Given:
Rate = 3%, Time = 2 years, Compound Interest = ₹203
Compound interest formula:
CI = P × [(1 + 3/100)2 - 1] = P × (1.0609 - 1) = P × 0.0609
So, 203 = P × 0.0609
⇒ P = 203 ÷ 0.0609 ≈ 3333
Simple Interest = (P × R × T) / 100 = (3333 × 3 × 2) / 100 = 200