The principal increases by 10% in 2 years at simple rate of interest. At the same rate of interest, find the compound interest on Rs 26,000 after 2 years.

2665

Principal increases by = 10%

Time = 2 year

Rate = \(\frac{Increased \; percentage}{time}\) = \(\frac{10}{2}\) = 5%

Effective rate will be (compound interest) = 5 + 5 + \(\frac{5 × 5}{100}\) = 10.25%

compound interest = 10.25% × 26000 = 2665