Question
Download Solution PDFAjay 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?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFGiven:
Compound Interest (CI) after 2 years = ₹204
Rate of Interest (r) = 4% per annum
Time (t) = 2 years
Formula used:
CI = P × [(1 + r/100)t - 1]
SI = P × r × t / 100
Calculations:
204 = P × [(1 + 4/100)2 - 1]
⇒ 204 = P × [(1.04)2 - 1]
⇒ 204 = P × [1.0816 - 1]
⇒ P = ₹2500
Now, calculate Simple Interest (SI):
SI = P × r × t / 100
⇒ SI = 2500 × 4 × 2 / 100
⇒ SI = ₹200
∴ The correct answer is option (3).
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