What will be the compound interest on a sum of ₹ 1200 for 2 years at the rate of 20% per annum when the interest is compounded yearly?

₹ 624 ₹ 504 ₹ 576 ₹ 528

₹ 528

From the formula for compound interest, we know, C.I = P(1+$\frac{R}{100})^t$– P  = 1200 [ 1 + \(\frac{20}{100}\) ]² - 1200  = 1200 [ \(\frac{6}{5}\) × \(\frac{6}{5}\)  - 1 ]  = 1200 [ \(\frac{36}{25}\)  - 1 ] = 1200 [ \(\frac{11}{25}\) ] = Rs. 528