Rs $1600$ becomes Rs $2000$ in $2$ years at compound interest. The amount after $4$ years will be:

Question

Rs $1600$ becomes Rs $2000$ in $2$ years at compound interest. The amount after $4$ years will be:

Option A

Rs 2250

Option B

Rs 2400

Option C — Correct answer

Rs 2500

Correct choice.

Option D

Rs 2560

Explanation

The 2-year growth factor is $\frac{2000}{1600}=\frac54$. After 4 years, apply the same factor twice: $1600\times\left(\frac54\right)^2=2500$.

Chapter Mock 5: Simple Interest and Compound Interest