Correct Answer - Option 3 : Rs. 87,400

Formula Used :

For compound interest

A = P(1 + R/100)n

where P → Principal Amount

A → Final Amount

R→ Interest rate

n → Time Period

Compound Interest (CI) = A – P

⇒ CI = P(1 + R/100)n – P

For simple interest

SI = (P × R × T)/100

where P → Principal Amount

SI → Simple Interest

R→ Interest rate

T → Time Period

∴ According to question,

P(1 + 10/100)^{2} – P – (P × 10 × 2)/100 = 874

⇒ 1..21P – P – 0.20P = 874

⇒ 0.01P = 874 or P = 87400

**∴ The sum is Rs.87,400**