Question

# Calculate the amount and compound interest on Rs 5000 in two years when the rate for interest for successive years is 6% and 8% respectively.

Hint: Use the information, $SI = \dfrac{{PTR}}{{100}}$ where, P is principal amount, T is time for the interest and R is interest rate. Also, the compound interest amount at the end of first year will work as a principal amount.
$SI = \dfrac{{PTR}}{{100}} = \dfrac{{5000 \times 10 \times 6}}{{100}} = Rs.300$. So, the
The principal amount for second year will be $P + SI = 5300$. In second year, the interest rate is
$= \dfrac{{5300 \times 1 \times 8}}{{100}} = Rs.424$. Total amount will be $P + SI = 5300 + 424 = 5724$. The interest of second year is the required compound interest. So, $CI = Rs.424$and the required amount is $Rs.5724$.