Correct Answer - Option 3 : Rs. 144

**Given:**

Sum borrowed by Zaved for 2 years = Rs.10000

Amount paid by Zaved at the end of 2 years = Rs.12544

**Formulas used:**

When interest compounded annually;

Amount = Principal × (1 + r/100)^{n}

Amount at simple interest;

Amount = Principal + Principal × Rate/100 × Time

**Calculation:**

12544 = 10000 × (1 + r/100)^{2}

⇒ 12544/10000 = (1 + r/100)2

⇒ √(784/625) = 1 + r/100

⇒ 28/25 - 1 = r/100

⇒ 3/25 = r/100

⇒ 25r = 300

⇒ r = 300/25 = 12%

Amount at the end of 2 years at 12% per annum simple interest;

Amount = 10000 + 10000 × 12/100 × 2

⇒ 10000 + 2400

⇒ 12400

**∴ The Amount saved by Zaved = Rs.12544 - Rs.12400 = Rs.144**