Correct Answer - Option 1 : ₹100

**Given: **

Compound interest on a sum = Rs. 102

Rate of interest = 4%

Time = 2 years

**Formula Used: **

For Compound Interest

CI = P(1 + r/100)^{t} – P

For Simple Interest

SI = P × R/100 × T

**Calculation: **

102 = P( 1 + 4/100)^{2} - P

⇒ 102 = P(104/100)^{2} – P

⇒ 102 = 1.0816P – P

⇒ 102 = 0.0816P

⇒ P = 1250

Now to calculate SI

SI = 1250 × 4/100 × 2 = 100

**∴ The simple interest will be Rs.100**