The compound interest on an amount for 2 years at 5% per annum compounded annually is Rs. 205. The simple interest is :
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Correct answer: C
Explanation
The correct answer is option 3 i.e. Rs. 200.
P = Principal
SI = Principal × Rate × Time/100
Compound interest = P{(1 + r/100)n - 1}
⇒ 205 = P{(1 + 5/100)2 - 1}
⇒ 205 = P{441/400 - 1}
⇒ 205 = P{(41/400}
⇒ P = 2000
S.I = 2000 × 5 × 2/100 = 200