Question

The compound interest accrued on an amount of Rs. 10000 at the end of two years is Rs. 2544. What would be the simple interest accrued on the same amount at the same rate at the end of four years?

• A. Rs. 4,650
• B. Rs. 5,650
• C. Rs. 4,800
• D. Rs. 5,400
• E. None of these

Answer 1

The correct option is C Rs. 4,800

It is given that principle = Rs. 10000 and compound interest at the end of 2 years = Rs. 2544

Let the rate of interest be r% per annum.
So,
$10000\times {(1+\frac{r}{100})}^2-10000=2544$

$\Rightarrow {(1+\frac{r}{100})}^2=1.2544$

$\Rightarrow 1+\frac{r}{100}=1.12$

r =12%

So, the rate of interest is 12%

Required simple interest for 4 years = $\frac{12\times 10000\times 4}{100}=Rs.4800$

Hence, option C is the correct answer.