Given, principal (P) = Rs. 50000
Rate of interest (R%) = 4% per annum
Time period (T) = 2 yr We know that,
A=P(1+R100)T∴A=50000(1+4100)2=50000(1+125)2=50000×2625×2625=80×26
∴ Compound interest, CI = A - P = Rs 54080 - Rs 50000 = Rs 4080
Hence, option (b) is correct.