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

B

Explanation

Rate of simple interest = `( " Interest" xx 100)/( " principal " xx " time")`
`= ( 10800 xx 100)/(22500 xx 4) = 12% `
Compound interest = Principal ` [ (1 + ("rate")/100)^("time") -1]`
`= 22500[ (1+ 12/100)^(2) -1]`
` = 22500 [ ( 1 + 3/25)^(2) -1]`
` = 22500 [ (28/25)^(2) -1] = 22500(784/625 -1)`
` = 22500 xx 159/625 = ₹ 5724`