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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?
  1. Rs. 220
  2. Rs. 250
  3. Rs. 225
  4. Rs. 200
Explanation

Let the principal be Rs. P. 
According to the question,
 

 = Rs. 250
Hence, the principal is Rs. 250.

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