What is the compound interest on ₹10,625 for 2 years at 8% interest per annum, if interest is compounded annually?

₹1,768

From the formula for compound interest, we know,

C.I = P(1+$\frac{R}{100})^t$– P

 = 10625 [ 1 + \(\frac{8}{100}\) ]² - 10625

 = 10625 [ \(\frac{27}{25}\) × \(\frac{27}{25}\) - 1 ]

 = 10625 [ \(\frac{729}{625}\)  - 1 ]

= 10625 [ \(\frac{104}{625}\) ]

= Rs. 1768