A man deposited Rs. 40,000 in a bank at 10% per annum, compounded annually for two years. He wanted to keep the amount deposited at the end of the two years, but there was a new law in place that for any amount in the account that date onwards, any annual interest greater than Rs.2,500 would be taxed. Also, the rate of interest was reduced to 8% per annum. What amount should he remove from his account to ensure that he just avoids paying the tax? Assume that his account had zero balance before he deposited Rs. 40,000.

• A. Rs. 31,250
• B. Rs. 24,000
• C. Rs. 21,684
• D. Rs. 18,050
• E. Rs. 17,150