Question

Ajay invested some money in HDFC at 4% per annum rate of interest. What would be the corresponding simple interest (in ₹) if after 2 years, Ajay got ₹204 as compound interest, considering annual compounding?

• A. 215
• B. 200
• C. 210
• D. 195

Answer 1

Answer:

B. 200

Let the principal be P.

Use compound interest formula (2 years, 4%)

$\text{CI} = P\left(1+\frac{4}{100}\right)^2 - P$

$204 = P\left(1.04^2 - 1\right)$
$1.04^2 = 1.0816$
$\Rightarrow 204 = P(0.0816)$
$P = \frac{204}{0.0816} = 2500$
Find simple interest

$\text{SI} = \frac{P \times R \times T}{100}$
$= \frac{2500 \times 4 \times 2}{100}$
$= 200$
Final Answer:

₹200