If the compound interest on a principal amount for 2 years at an annual rate of 10% is Rs.420, what will be the simple interest on the same principal, at the same rate and for the same duration?

Explanation

Let the principal be P. Using the compound interest formula: P(1 + 10/100)^2 - P = 420. Solving this gives P = Rs.2000. The simple interest for 2 years is calculated as (P × rate × time) / 100 = (2000 × 10 × 2) / 100 = Rs.400.