Answer: To calculate the total amount after 4 years, we need to consider the interest earned on the principal amount and subtract the tax amount.
Given:
Principal amount (P) = Rs 10,800
Interest rate (R) = 10% per year
Time (t) = 4 years
Tax rate = 5% of the interest earned
Step 1: Calculate the interest earned over 4 years.
Interest (I) = P * R * t
Interest (I) = 10800 * 0.10 * 4
Interest (I) = 4320
Step 2: Calculate the tax amount on the interest earned.
Tax amount = 5% of the interest
Tax amount = 0.05 * 4320
Tax amount = 216
Step 3: Subtract the tax amount from the total interest earned to get the net interest.
Net interest = Interest - Tax amount
Net interest = 4320 - 216
Net interest = 4104
Step 4: Calculate the total amount after 4 years by adding the net interest to the principal amount.
Total amount = Principal amount + Net interest
Total amount = 10800 + 4104
Total amount = 14904
So, the total amount after 4 years will be Rs 14,904.