Explanation:

To solve this problem, let's break down the interest calculations for each year:

- Year 1: The loan is subjected to a 5% interest rate.

- Year 2: The interest rate increases to 5.5%.

- Year 3: The interest rate further increases to 6%.

- Year 4: The interest rate becomes 6.5%.

Calculate the total interest for each year:

- Interest for Year 1 = 5% of Principal

- Interest for Year 2 = 5.5% of Principal

- Interest for Year 3 = 6% of Principal

- Interest for Year 4 = 6.5% of Principal

The total interest paid over four years is Rs. 4,600. We create the equation:

$$\text{Principal}\times (\frac{5}{100}+\frac{5.5}{100}+\frac{6}{100}+\frac{6.5}{100})=4600$$

$$\text{Principal}\times \frac{23}{100}=4600$$

$$\text{Principal}=\frac{4600\times 100}{23}=20,000$$

- Option 1: Rs. 20,000

- Option 2: Rs. 19,000

- Option 3: Rs. 18,000

- Option 4: Rs. 21,000

Given the calculations, the correct answer is Option 1: Rs. 20,000.