Correct Answer - Option 1 : Rs. 2860

**Given:**

P = Rs. 6500

R = 20%

N = 2

**Formula used:**

A = P × (1 + (R/ 100))^{N}

A = P + I

Where, P = Principal amount, R = Rate of interest, N = number of years and I = Simple interest

**Calculation:**

A = 6500 × (1 + (20/ 100))^{2}

⇒ A = 6500 × 6 × 6/ 25

⇒ A = 260 × 36

⇒ A = 9360

A = P + I

⇒ I = 9360 – 6500

⇒ I = 2860

**∴ I = Rs. 2860**