Answer: The formula for compound interest is:
A = P(1 + R/100)^t
where A is the amount after t years, P is the principal amount, R is the rate of interest per annum, and t is the time period in years.
Here, P = Rs. 3,500, R = 8%, and t = 2 years.
So, the amount after 2 years will be:
A = 3,500(1 + 8/100)^2
= 3,500(1.08)^2
= 3,892.32
Therefore, the compound interest for 2 years will be:
CI = A - P
= 3,892.32 - 3,500
= 392.32
Hence, the compound interest on Rs. 3,500 for 2 years at the rate of 8% per annum is Rs. 392.32.
Explanation: