At the end of 2020, the compound interest amounted to ₹ 3850 at 10% C.I. The C.I. on the same sum and at same rate amounted at the end of 2019 was :

1. ₹ 3500

2. ₹ 4235

3. ₹ 3181

4. ₹ 3182

Let C.I. in 2019 be ₹ x.

Difference in C.I. of successive years = ₹ 3850 - ₹ x.

So,

∴ ₹ (3850 - x) is the interest of one year on ₹ x.

By formula,

Rate of interest = $\dfrac{100 \times I}{P \times T}$

Substituting values we get :

$\Rightarrow 10 = \dfrac{100 \times (3850 - x)}{x \times 1} \\[1em] \Rightarrow 10x = 100(3850 - x) \\[1em] \Rightarrow x = 10(3850 - x) \\[1em] \Rightarrow x = 38500 - 10x \\[1em] \Rightarrow 11x = 38500 \\[1em] \Rightarrow x = \dfrac{38500}{11} \\[1em] \Rightarrow x = 3500.$

Hence, Option 1 is the correct option.