The simple interest accrued on an amount of ₹22,500 at the ends of four years is ₹10,800. What would be the compound interest accrued on the same amount at the same rate at the end of two years?

Options

A. ₹16,908
B. ₹5,724
C. ₹28,224
D. ₹8,586

Answer

D

Explanation

Rate of simple interest
`=( "Interest" 100)/("Principal"xx"time")`
`= (10800xx100)/(22500xx4) = 12 %`
Compound interest
`=P[(1+r/100)^t-1] `
` = 22500[(1+12/100)^2-1]`
`= 22500[(1+3/25)^2-1]`
` = 22500[(28/25)^2-1] = 22500(784/625-1)`
`= 22500xx159/625 = ₹ 5724`