Correct Answer - Option 3 : Rs. 7785

**Given:**

The Simple Interest, SI = 5880

Time, n = 2.5 years

Rate of Interest, r = 10%

Time = 3 years for CI

**Formula:**

SI = PRT/100

Amount = P(1 + R/100)^{n}

CI = P(1 + R/100)^{n} - P

**Calculations:**

The principal, P, is calculated as:

SI = PRT/100

⇒ 5880 = (P × 10 × 2.5)/100

⇒ P = (5880 × 100)/25

⇒ 23520

∴ the Principal is Rs. 23520.

The compound interest for the same sum in 3 years is calculated as follows;

⇒ CI = Amount - Principal

⇒ Amount = P(1 + r/100)^{3}

⇒ CI = P (1 + r/100)^{3 } – P

⇒ 23520 (1 + 10/100)^{3} – 23520

⇒ 23520 (110/100)^{3} – 23520

⇒ (23520 × (11/10)^{3}) – 23520

⇒ 31305.12 – 23520

⇒ Rs. 7785.12 = Rs. 7785

**∴**** compound interest is Rs. 7785**