What is the compound interest on ₹11,400 for 2 years at 10% per year, compounded annually?

💡 Solution & Explanation

Year 1 interest = 10% of ₹11,400 = ₹1,140, so the amount becomes ₹12,540. Year 2 interest = 10% of ₹12,540 = ₹1,254. Total compound interest = ₹2,394. Simple interest would be only ₹2,280; the extra is interest earned on the first year's interest.