Correct Answer - Option 4 : 11250

**Given:**

Satish borrowed Rs.24000 at the rate of 12.5% compounded annually. At the end of 1^{st} 2^{nd} and 3^{rd} years he paid Rs.7000, Rs.6500 and Rs.8000 respectively.

**Formula:**

Amount under simple interest = P × r × t/100

Amount under compound interest = P (1 + r/100)^{t},

where P is principle, r is rate of interest and t is time

**Calculation:**

Amount of 1^{st} yr = 24000 × (1 + 1/8) = 27000

At end of 1st year = 27000 - 7000 = Rs.20000

Amount of 2^{nd} yr = 20000 × 9/8 = 22500

At the end of 2nd year = 22500 - 6500 = Rs.16000

Amount of 3^{rd} yr= 16000 × 9/8 = 18000

At the end of 3rd year = 18000 - 8000 = Rs.10000

Amount of 4^{th} yr = 10000 × 9/8 = Rs.11250