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Question : A person deposited INR 15,600 in a fixed deposit at 10% per annum simple interest. After every second year, he adds his interest earned to the principal. The interest at the end of 4 years is:

Option 1: INR 6,655

Option 2: INR 6,864

Option 3: INR 3,975

Option 4: INR 3,744


Team Careers360 20th Jan, 2024
Answer (1)
Team Careers360 24th Jan, 2024

Correct Answer: INR 6,864


Solution : Simple interest = $\frac{(P \times T \times R)}{100}$
Here,
$P$ = Principal
$T$ = Time
$R$ = Rate
Interest after 2 years = $\frac{15600\times 10\times 2}{100} = 3120$
New principal after 2 years = 15600 + 3120 = INR 18,720
Now, the interest after next 2 years = $\frac{18720\times 10\times 2}{100} =3744$
So, the total interest after 4 years = 3120 + 3744 = INR 6,864
Hence, the correct answer is INR 6,864.

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