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The simple interest on a certain sum at 5% per annum for 4 years is Rs. 800. What will be the compound interest on the same sum for the same period at the same rate?

A850
B840
C855
D862 ✓ Correct
Correct answer: (D) 862
Explanation

The compound interest is about Rs. 862.

From SI = P x R x T / 100, 800 = P x 5 x 4 / 100, so P = 4000.

Amount = P x (1 + R/100)^T = 4000 x (1.05)^4.

(1.05)^4 = 1.21550625, so amount = 4862.03.

CI = 4862.03 - 4000 = 862 (approx).

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