Discussion

Explanation:

Let the sum invested be A and rate of interest r% p.a.

At the end of  two years, the total interest was equal to the sum

∴ $\frac{\mathrm{A}\times \mathrm{r}\times 2}{100}$ = A

⇒ r = 50% p.a.

Also, at the end of four years the total interest was Rs. 6,250

⇒ $\frac{\mathrm{A}\times \mathrm{r}\times 4}{100}$ = 6250

⇒ A = $\frac{6250\times 100}{50\times 4}$ = 3125.

Alternately,
Interest for 2 years = Amount invested

Given, Interest for 4 years = Rs. 6250

⇒ 2 × (Amount invested) = 6250

⇒ Amount invested = 3125

Hence, 3125.

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