Explanation:

To calculate compound interest for 2 years on Rs 6,250 at an annual interest rate of 8%, use the formula:

\[ A = P \left(1 + \frac{r}{100}\right)^n \]

- Where:

- \( P = 6,250 \) (Principal amount)

- \( r = 8\% \) (Annual interest rate)

- \( n = 2 \) (Number of years)

- Calculation:

- First, find the amount after 2 years:

\[ A = 6250 \left(1 + \frac{8}{100}\right)^2 \]

\[ A = 6250 \times \left(1.08\right)^2 \]

\[ A = 6250 \times 1.1664 \]

\[ A = 7,290 \]

- Compound Interest:

\[ \text{C.I.} = A - P = 7,290 - 6,250 = 1,040 \]

- Correct Option:

- Option 1: Rs 1,040

? Option 1: Rs 1,040