At a certain sum of money with the interest rate of 6% per annum for 4 years, the simple interest is Rs. 4500. Find the compound interest (compounding annually) of 2 years at the same sum when the rate of interest is 4% per annum?

Rs.1,530

Rate (R) = 6%

Time (T) = 4 year

Simple Interest (S.I.) = 4500

if Principal (P) = 100%

Interest (I) = Rate × Time

                 = 6 × 4 = 24%

ATQ,

24% = 4500

1% = \(\frac{4500}{24}\)

100% = Rs 18750

P = 18750

T = 2 year

Rate = 4%

Compound Interest for 2 years = R + R + \(\frac{R×R}{100}\)

 = 4 + 4 + \(\frac{4×4}{100}\)

 = 8 + \(\frac{16}{100}\)

 = 8 + 0.16

 = 8.16 %

ATQ

100% = 18750

1% = \(\frac{18750}{100}\)

8.16% = \(\frac{18750}{100}\)×8.16

=  Rs 1530