The compound interest on an amount for 2 years at 5% per annum compounded annually is ₹205. The simple interest is:
If P is the principal,
According to question, compound interest on an amount for 2 years at 5% per annum compounded annually is ₹205
$$P\times (105\div100) \times (105\div100) = P + 205$$
$$1.1025 P = P\times 205$$
$$1.1025 P - P = 205$$
$$P = \frac{205}{0.1025} = 2000$$
Now S I, for 2 years,
$$\frac{P\times 2\times 5}{100} = ₹ 200$$
Option C is correct.
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