Calculation of Compound Interest on RS 25000 for 2 years at 12% per annum compounded annually

Given:
Principal amount (P) = RS 25000
Time (t) = 2 years
Rate of interest (R) = 12% per annum

Formula:
Compound interest (CI) = P[1 + (R/100)]^t - P

Calculation:
Substituting the given values in the formula:

CI = 25000[1 + (12/100)]^2 - 25000
CI = 25000[1.12]^2 - 25000
CI = 25000[1.2544 - 1]
CI = 25000[0.2544]
CI = RS 6360

Therefore, the compound interest on RS 25000 for 2 years at 12% per annum compounded annually is RS 6360.

Calculation of Amount:

Formula:
Amount (A) = P[1 + (R/100)]^t

Calculation:
Substituting the given values in the formula:

A = 25000[1 + (12/100)]^2
A = 25000[1.12]^2
A = 25000[1.2544]
A = RS 31360

Therefore, the amount after 2 years on RS 25000 at 12% per annum compounded annually is RS 31360.

Explanation:
Compound interest is the interest calculated on the principal amount as well as the accumulated interest over a period of time. In this case, the principal amount is RS 25000, the rate of interest is 12% per annum and it is compounded annually for 2 years. The formula for calculating compound interest is P[1 + (R/100)]^t - P. The amount can be calculated using the formula P[1 + (R/100)]^t. Upon substituting the given values in the formula, we get the compound interest as RS 6360 and the amount as RS 31360.