The compound interest on a sum for 2 years at 10% per annum, compounded annually, is ₹2,520. What is the simple interest on the same sum for the same time and rate?

Explanation

1. 01

   CI for 2 years at $10\% = P[(1.1)^2 - 1] = 0.21P$, so $P = \frac{2520}{0.21} = 12000$.

2. 02

   SI = $12{,}000 \times 10 \times 2 \div 100$ = ₹2,400.