(i) The difference between the amounts of two successive years = ₹ 31,944 - ₹ 29,040 = ₹ 2,904
⇒ ₹ 2,904 is the interest of one year on ₹ 29040.
P = ₹ 29,040, R = R %, T = 1 year, I = ₹ 2,904
$$\begin{aligned}\text{Rate of interest} = \frac{100\times \text{I}}{\text{P}\times\text{T}}\\[1em] \Rightarrow R = \frac{100\times 2904}{29040 \times 1}\\[1em] \Rightarrow R = \frac{2,90400}{29,040}\\[1em] \Rightarrow R = 10%\end{aligned}$$
Hence, the rate of interest = 10%.
(ii) Let P be the original principal.
For the first year:
P = ₹ P, R = 10 %, T = 1 year
$$\begin{aligned}\text{Interest} = \frac{P \times R \times T}{100}\\[1em] = \frac{P \times 10 \times 1}{100}\\[1em] = \frac{10P}{100}\\[1em] = \frac{P}{10}\end{aligned}$$
Amount at the end of first year = P + I
= ₹ P + $\frac{P}{10}$
= ₹ $\frac{11P}{10}$
For the second year:
P = ₹ $\frac{11P}{10}$, R = 10 %, T = 1 year, I = ₹ 29,040
$$\begin{aligned}\text{Interest} = \frac{P \times R \times T}{100}\\[1em] = \frac{\frac{11P}{10} \times 10 \times 1}{100}\\[1em] = \frac{11P}{100}\end{aligned}$$
29,040 = ₹ $\frac{11P}{100}$
⇒ P = ₹ $\frac{100 \times 29,040}{11} = \frac{29,04,000}{11}$ = ₹ 2,64,000
Principal amount for second year = ₹ $\frac{11}{10} \times 2,64,000$ = ₹ 2,90,400
Principal amount for third year = ₹ 2,90,400 + C.I. for second year = ₹ 2,90,400 + 29,040 = ₹ 3,19,440
Principal amount for fourth year = ₹ 55,770 + C.I. for third year = ₹ 3,19,440 + 31,944 = ₹ 3,51,384
For the fourth year:
P = ₹ 3,51,384, R = 10 %, T = 1 year
$$\begin{aligned}\text{Interest} = \frac{P \times R \times T}{100}\\[1em] = \frac{3,51,384 \times 10 \times 1}{100}\\[1em] = \frac{35,13,840}{100}\\[1em] = 35,138.4\end{aligned}$$
Hence, the interest at the end of fourth year = ₹ 35,138.4.
(iii) For the first year:
P = ₹ 2,64,000, R = 10 %, T = 1 year
$$\begin{aligned}\text{Interest} = \frac{P \times R \times T}{100}\\[1em] = \frac{₹ 2,64,000 \times 10 \times 1}{100}\\[1em] = ₹ 26,400\end{aligned}$$
Hence, the interest for 1st year = ₹ 26,400.