The amount that ₹4,375 computes in 2 years at annual compound interest, if the rates for the successive years be 8% and 12% per annum, respectively, is:

Correct option is B

Given:

Principal (P) = ₹4375

Time = 2 years

Rate for 1st year = 8%

Rate for 2nd year = 12%

We need the Amount (A).

Formula Used:

When successive years have different rates:

A = P$$\times \left(1 + \frac{R_1}{100}\right) \times \left(1 + \frac{R_2}{100}\right)$$​

Solution:

Apply formula

A = $$4375 \times (1 + 0.08) \times (1 + 0.12)$$​

= 4375$$\times 1.08 \times 1.12$$​

= 5292

The required amount = ₹5292