Correct Answer - Option 1 : 630.5
Given:
A sum becomes Rs.6888 in 8 years and becomes Rs.7380 in 10 years.
Formula:
Amount under simple interest = P × r × t/100
Amount under compound interest = P + (P × r × t/100)
where, P is principal, r is rate of interest and t is time.
Calculation:
Interest = 7380 - 6888 = 246
P = 6888 – 1968 = 4920
R = 246 × 100/4920 = 5%
In compound interest,
4000 × 21 × 21 × 21/(20×20×20) = 4630.5
∴ Compound interest earned = 630.5