What will be the compound interest on a sum of Rs. 1875 after 2 years if the rate of interest for the first year is 4% and that for the second year is 8%?

247

231

274

None of these

To calculate the compound interest, we need to calculate the interest for each year and add it to the principal.

Year 1:

Principal = Rs. 1875

Rate = 4%

Interest = (1875 x 4)/100 = Rs. 75

Amount = Principal + Interest = 1875 + 75 = Rs. 1950

Year 2:

Principal = Rs. 1950 (amount after 1st year)

Rate = 8%

Interest = (1950 x 8)/100 = Rs. 156

Amount = Principal + Interest = 1950 + 156 = Rs. 2106

Now, let's calculate the compound interest:

Compound Interest = Amount - Principal = 2106 - 1875 = Rs. 231