Sarang invested a certain sum of money at 10% per annum. After 2 years, he received ₹178.5 as compound interest, compounded annually. Find the corresponding simple interest (in ₹) for 2 years at the same rate.
170
Let the principal be \(P\). At 10% per annum compounded annually for 2 years, the compound interest factor over the principal is \((1.1)^2 - 1 = 1.21 - 1 = 0.21\).
So compound interest \(= 0.21P = 178.5\), giving \(P = \frac{178.5}{0.21} = 850\).
Simple interest for 2 years at 10% \(= P \times \frac{10}{100} \times 2 = 850 \times 0.1 \times 2\).
This equals \(170\).
Hence, the simple interest for 2 years is \(₹170\).
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