Simple Interest — Find the difference between amount and principal for ₹ 4000 at 5% per annum in 4 years (i.e., the simple interest).

Introduction / Context:
The difference between amount and principal under simple interest over a time period is exactly the simple interest accrued.

Given Data / Assumptions:

• P = ₹ 4000.
• r = 5% = 0.05 per annum.
• t = 4 years.

Concept / Approach:
SI = P * r * t; Amount A = P + SI. The requested difference is SI itself.

Step-by-Step Solution:
SI = 4000 * 0.05 * 4 = 4000 * 0.20 = ₹ 800.

Verification / Alternative check:
A = 4000 + 800 = 4800; difference A − P = 800, as expected.

Why Other Options Are Wrong:
₹ 865, ₹ 865.50, ₹ 780, ₹ 400 are not equal to SI computed at 5% for 4 years.

Common Pitfalls:
Confusing rate per year with total rate over multiple years; always multiply by time.

Final Answer:
₹ 800