Explanation:
S.I. = 500
r = 5%
t = 2 years
Before finding C.I. we have to find the sum or principal;
Apply formula; Principal = 
Principal =
= Rs. 5000
Now we have to find the Amount;
Apply formula; Amount =
Amount = 5000 

= 5000 * 1.05 * 1.05 = Rs. 5512.5
C.I. = Amount – Principal
C.I. = 5512.5 – 5000 = Rs. 512.5 (Option D)