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

$$\eqalign{ & {\text{Given}}, \cr & {\text{Compound}}\,{\text{rate}},\,R = 10\% \,{\text{per}}\,{\text{annum}} \cr & {\text{Time}} = 2\,{\text{years}} \cr & CI - Rs.\,420 \cr & {\text{Let}}\,P\,{\text{be}}\,{\text{the}}\,{\text{required}}\,{\text{principal}} \cr & A = \left( {P + CI} \right) \cr & {\text{Amount}},A = \left\{ {P \times {{\left[ {1 + \left( {\frac{R}{{100}}} \right)} \right]}^n}} \right\} \cr & \left( {P + CI} \right) = \left\{ {P \times {{\left[ {1 + \frac{{10}}{{100}}} \right]}^2}} \right\} \cr & \left( {P + 420} \right) = P \times {\left[ {\frac{{11}}{{10}}} \right]^2} \cr & P - 1.21P = - 420 \cr & 0.21P = 420 \cr & {\text{Hence}},P = \frac{{420}}{{0.21}} = Rs.\,2000 \cr} $$