A sum increases by 100% in 8 years at a certain rate of Simple Interest. What will be the Compound Interest on Rs.8000 after 2 years at the same rate of interest?

Correct option is D

Given:

Simple interest for 8 years = 100%

Formula used:

Simple interest = $$\frac{P \times R \times T}{100}$$​​

​$$A = P \{1 + \frac{r}{100})^t$$​​

CI = A - P

Solution:

Simple interest for 1 year = rate of interest = $$\frac{100}{8} = 12.5\%$$​​

Now,

P = Rs. 8000,

r = 12.5%

t = 2 years

As we know,

A = 10125

So,

CI = 10125 – 8000 = 2125

Compound Interest = Rs. 2125