What will be the compound interest on a sum of ₹4,50,000 at the rate of 10% per annum in 2 years, if interest is compounded annually?

₹94,500

From the formula for compound interest, we know,

C.I = P(1+$\frac{R}{100})^t$– P

= 450000 [ 1 + \(\frac{10}{100}\) ]²- 450000

= 450000[ \(\frac{121}{100}\)  - 1 ] 

= 450000[ \(\frac{21}{100}\)  ]

= Rs. 94500