a) Rs. 1000
b) Rs. 500
c) Rs. 200
d) Rs. 800

Answer: b
Explanation: Let the sum of money be rs. P
$$\eqalign{ & \left[ {P{{\left( {1 + \frac{R}{{100}}} \right)}^t} – P} \right] = {\text{C}}{\text{.I}}{\text{.}} \cr & \left[ {P{{\left( {1 + \frac{{10}}{{100}}} \right)}^2} – P} \right] = 525 \cr & P{\left( {\frac{{11}}{{10}}} \right)^2} – 1 = 525 \cr & P\left( {\frac{{121}}{{100}} – 1} \right) = 525 \cr & P\left( {\frac{{21}}{{100}}} \right) = 525 \cr & P = \frac{{525 \times 100}}{{21}} \cr & P = {\text{Rs}}{\text{.}}\,2500 \cr} $$
Simple interest on the same sum Rs. 2500 for 4 (double the time) years at 5% (half the rate of percent per annum) is
$$\eqalign{ & {\text{S}}{\text{.I}}{\text{. = Rs}}{\text{.}}\left( {\frac{{2500 \times 5 \times 4}}{{100}}} \right) \cr & \,\,\,\,\,\,\,\,\,{\text{ = Rs}}{\text{. 500}} \cr} $$