The principal, which will amount to Rs. 270.40 in 2 years at the rate of 4% per annum compound interest is? - IQ786

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

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

Rs. 220

Rs. 250

Rs. 225

Rs. 200

Explanation

Let the principal be Rs. P.
According to the question,
$∴ 270.40 = P (1 + \frac{4}{1 0 0})^{2}$
$\Rightarrow 270.40 = P (1 + 0.04)^{2}$
$\Rightarrow P = \frac{2 7 0 . 4 0}{1 . 0 4 \times 1 . 0 4}$ = Rs. 250
Hence, the principal is Rs. 250.