Govind invested some money in HDFC at 4% per annum rate of interest. What would be the corresponding simple interest (in ₹) if after 2 years, Govind got ₹178.5 as compound interest, considering annual compounding?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2 i.e. 175.
CI = 178.5, R = 4%, T = 2 years
CI = P × (1.04)² - P = P × 0.0816
P = 178.5 / 0.0816 = 2187.5
SI = P × R × T / 100 = 2187.5 × 4 × 2 / 100 = 175