On what sum (in Rs.) will the compound interest at 2% p.a. for 2 years compounded annually be Rs. 9,696?

Correct option is D

Given:

Compound Interest (CI) = ₹9696

Rate = 2% per annum

Time = 2 years (compounded annually)

Formula Used:

CI = $$P \left( \left(1 + \frac{R}{100} \right)^T - 1 \right)$$​​

R = rate, T = time,

Solution:

Let Principal be P

Now using the formula;

​$$9696 = P \left( \left(1 + \frac{2}{100} \right)^2 - 1 \right)$$​​

​$$9696 = P \left( (1.02)^2 - 1 \right)$$​​

$$9696 = P (1.0404 - 1)$$​​

$$9696 = P \times 0.0404$$​​

​$$P = \frac{9696}{0.0404}= 240000$$​​

Thus, The required sum is ₹2,40,000