Choose the compound interest for 2 years on ₹4000 at an annual interest increase of 5% per year.

Explanation

Amount = Principal $\left(1 + \frac{Rate}{100}\right)^{time}$ = $4000 \left(1 + \frac{5}{100}\right)^2$ = $4000 \left(\frac{21}{20}\right)^2 = ₹4410$ Compound Interest = Amount – Principal Compound interest = (4410 – 4000) Rupees = 410 Rupees