Find the compound interest on ₹ 4000 accrued in three years, when the rate of interest is 8% for the first year and 10% per year for the second and the third years.

For first year :

P = ₹ 4000

T = 1 year

R = 8%

I = $\dfrac{P \times R \times T}{100}$

$= \dfrac{4000 \times 8 \times 1}{100}$ = ₹ 320.

Amount = P + I = ₹ 4000 + ₹ 320 = ₹ 4320.

For second year :

P = ₹ 4320

T = 1 year

R = 10%

I = $\dfrac{P \times R \times T}{100}$

$= \dfrac{4320 \times 10 \times 1}{100}$ = ₹ 432

Amount = P + I = ₹ 4320 + ₹ 432 = ₹ 4752

For third year :

P = ₹ 4752

T = 1 year

R = 10%

I = $\dfrac{P \times R \times T}{100}$

$= \dfrac{4752 \times 10 \times 1}{100}$ = ₹ 475.2

Amount = P + I = ₹ 4752 + ₹ 475.2 = ₹ 5227.20

Compound interest = Final amount - Initial principal

= ₹ 5227.20 - ₹ 4000 = ₹ 1227.20

Hence, compound interest = ₹ 1227.20