The compound interest on a sum for 2 years at 10% p.a. is Rs. 525. What is the simple interest on the same sum for double the time at half the rate per annum?

Problem restatement
Given CI over 2 years at 10% is Rs. 525. Find SI for 4 years at 5% on the same principal.

Given data

• CI (2 years, 10%) = Rs. 525
• Target: SI (4 years, 5%) on same P

Concept/Approach
From CI = P[(1 + 0.10)² − 1] = 0.21P, infer P. Then apply SI = P r t.

Step-by-step calculation
0.21P = 525 ⇒ P = 525 ÷ 0.21 = Rs. 2500SI = 2500 × 0.05 × 4 = Rs. 500

Verification/Alternative
Direct CI check: (1.1)² − 1 = 0.21; 0.21 × 2500 = 525 (consistent).