Sarang invested some money in HDFC at 4% per annum rate of interest. What would be the corresponding simple interest (in ₹) if after 2 years, Sarang got ₹153 as compound interest, considering annual compounding?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is Option 3 i.e. 150.
CI for 2 years = ₹153
Rate = 4% per year
Let principal = P
Compound Interest formula:
153 = P × (1.042 − 1) = P × 0.0816
P = 153 ÷ 0.0816 = ₹1875
Simple Interest = (1875 × 4 × 2) ÷ 100 = ₹150