The principal that becomes Rs 270.40 in 2 years at 4 percent compound interest is

Formula is Amount = Principal × (1 + r/100)ⁿ. Here amount = 270.40 rate = 4 percent n = 2. So Principal = 270.40 ÷ (1.04)² = 270.40 ÷ 1.0816 = 250. The correct answer is 250 rupees.