Multiple choice

The principal, which will amount to Rs 270.40 in 2 years at the rate of 4% per annum compound interest is

  1. Rs 200

  2. Rs 225

  3. Rs 250

  4. Rs 220
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Use compound interest formula: A = P(1 + r/100)^n. Given A = 270.40, r = 4%, n = 2 years. So 270.40 = P(1.04)^2 = P(1.0816). Therefore P = 270.40/1.0816 = 250. Verify: 250*(1.04)^2 = 250*1.0816 = 270.40.

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