Given: Principal, P = ₹ 5,000rate of interest, r = 20%,and time period, n = 2 years.
The amount after first year,
A=P(1+R100)
A=5000[1+20100]=₹6,000
The amount after second year,
A=P(1+R100)
New P=₹6,000
⇒A=6,000[1+20100] =₹7,200
So, compound interest,CI = Amount - Principal⇒CI=₹7200−₹5,000=₹2,200