The principal which will amounts to Rs. 270.40 in 2 years at the rate of 4% per annum compound interest, is = ?

$$\eqalign{ & 4\% = \frac{1}{{25}} \cr & \,\,\,\,\,\,\,\,\, = \frac{{26 \to {\text{Amount}}}}{{25 \to {\text{Principal}}}} \cr & {\text{Time = 2 years}} \cr & {\text{Principal}}\,\,\,\,\,{\text{Amount}} \cr & \,\,\,\,\,\,\,\,\,{\text{25}}\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,{\text{26}} \cr & \,\,\,\,\,\,\,\,\,{\text{25}}\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,{\text{26}} \cr & \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \cr & \,\,\,\,\,\,\,\,625\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,676 \cr & \,\,\,\, \downarrow \times 0.4\,\,\,\,\,\, \downarrow \times 0.4 \cr & \,\,\,\,\,\,\,\,\,250\,\,\,\,\,\,\,\,\,\,\,\,270.40 \cr & {\text{Hence required principal}} \cr & {\text{ = Rs.250}} \cr} $$