Find the time in which Rs. 2250 will become Rs. 4276.8 at the rate of 10% simple interest per annum, if the interest is also added to the principal value after every 2 years.?

Option 2 : 7 years

For 2 years

Simple interest = (P × R × T) /100

⇒ Simple interest on Rs. 2250 at 10% rate will be = (2250 × 10 × 2) /100 = 450

⇒ Principal value after two years will be = Rs 2250 + Rs 450 = Rs. 2700

For next 2 years

⇒ Simple interest on Rs. 2700 will be = (2700 × 10 × 2) /100 = 540

Now the principal value will be = 2700 + 540 = Rs. 3240

For next 2 years

Simple interest on Rs. 3240 will be = (3240 × 10 × 2) /100 = 648

Now the principal will be = Rs. 3240 + Rs. 648 = Rs. 3888

In next 1 year

Simple interest on Rs. 3888 will be 3888 × 10/100 × 1 = 388.8

Total amount now = Rs. 3888 + Rs. 388.8 = Rs. 4276.8

∴ Rs. 2250 becomes Rs. 4276.8 in (2 + 2 + 2 + 1 = 7 years)