Calculate the amount and the compound interest on ₹ 10,000 for 2 years at 8% p.a., compounded annually.

Given,

P = ₹ 10,000

n = 2 years

r = 8%

By formula,

$A = P\Big(1 + \dfrac{r}{100}\Big)^n$

Substituting values we get :

$\Rightarrow A = 10000\Big(1 + \dfrac{8}{100}\Big)^2 \\[1em] \Rightarrow A = 10000\Big(\dfrac{100+8}{100}\Big)^2 \\[1em] \Rightarrow A = 10000\Big(\dfrac{108}{100}\Big)^2 \\[1em] \Rightarrow A = 10000\Big(\dfrac{27}{25}\Big)^2 \\[1em] \Rightarrow A = 10000 \times \dfrac{729}{625} \\[1em] \Rightarrow A = ₹ 11,664$

Compound interest = Final amount - Initial principal

= ₹ 11,664 - ₹ 10,000 = ₹ 1,664

Hence, amount = ₹ 11,664 and compound interest = ₹ 1,664.