Find the principal if the interest compounded at the rate of 10 per annum for two years is Rs 420 ........

Explanation:

Compound rate, R = 10% per annum
Time = 2 years
C.I = Rs. 420
Let P be the required principal.
A = (P+C.I)
Amount, A = P(1 + (r/100))ⁿ

(P+C.I) = P[1 + (10/100)]²

(P+420) = P[11/10][11/10]

P-1.21P = -420

0.21P = 420

P = 420/0.21 = Rs. 2000

Hence, option 3 is the correct answer.