Find the amount and the compound interest on ₹2000 in 2 years if the rate is 4% for the first year and 3% for the second year.

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

For first year, P = ₹2000 and rate = 4%.

Using formula,

$A = P\Big(1 + \dfrac{r}{100}\Big)^n \\[1em] = ₹2000 \times \Big(1 + \dfrac{4}{100}\Big)^1 \\[1em] = ₹2000 \times \Big(\dfrac{104}{100}\Big) \\[1em] = ₹2000 \times \dfrac{26}{25} \\[1em] = ₹80 \times 26 \\[1em] = ₹2080.$

For second year, P = ₹2080 and rate = 3%.

Using formula,

$A = P\Big(1 + \dfrac{r}{100}\Big)^n \\[1em] = ₹2080 \times \Big(1 + \dfrac{3}{100}\Big)^1 \\[1em] = ₹2080 \times \Big(\dfrac{103}{100}\Big) \\[1em] = ₹\dfrac{214240}{100} \\[1em] = ₹2142.40$

C.I. = Final Amount - Principal = ₹2142.40 - ₹2000 = 142.40

Hence, the amount = ₹2142.40 and compound interest = ₹142.40