If a man invests ₹12000 for two years at the rate of 10% per annum compound interest, then the compound interest earned by him at the end of two years is

1. ₹2400

2. ₹2520

3. ₹2000

4. ₹1800

C.I. = $P\Big[\Big(1 + \dfrac{r}{100}\Big)^n - 1\Big]$

Putting values in formula we get,

$C.I. = ₹12000 \times \Big[\Big(1 + \dfrac{10}{100}\Big)^2 - 1\Big] \\[1em] = ₹12000 \times \Big[\Big(\dfrac{110}{100}\Big)^2 - 1\Big] \\[1em] = ₹12000 \times \Big[\Big(\dfrac{11}{10}\Big)^2 - 1\Big] \\[1em] = ₹12000 \times \Big[\dfrac{121}{100} - 1\Big] \\[1em] = ₹12000 \times \dfrac{21}{100} \\[1em] = ₹120 \times 21 \\[1em] = ₹2520.$

Hence, Option 2 is the correct option.