Compound Interest is differ from simple interest .If we calculate interest on principal with previous year interest , then calculated interest is called compound Interest.

Formula of Compound Interest =P[( 1+R/100) and its power t - 1 ]

suppose Principal =Rs.8000

rate of compound Interest =5%

Time = 2 year

Compound Interest = P[( 1+R/100) and its power t - 1 ]

C.I.= 8000[(1+5/100) and its power 2 -1]

C.I.=Rs. 820 /-