Correct Answer - Option 1 : Rs. 6250

**Given**

Amount = Rs 6760

Time = 2 years

Rate = 4% per annum

**Formula used**

A = P(1 + r%)^{t}

Where A, P, r and t are amount, principal, rate and time respectively.

**Calculation**

6760 = P[1 + (4/100)]^{2}

⇒ 6760 = P (104/100)^{2}

⇒ (6760 × 100 × 100)/(104 × 104) = P

⇒ 6250 = P

**∴ Principal is Rs.6250**