A bank gives Rs. 25,000 on saving a certain principal in 2 years at 8% rate of interest. How much will the bank give (in Rs.) on the same principal in 4 years at the same rate of interest compounded annually?

Since Rs. 25,000 is the amount for 2 years at 8% compound interest, we apply the compound interest formula by squaring this amount and dividing by the principal squared, or simply use the fact that the amount for 4 years is the amount for 2 years multiplied by (1 plus 0.08) squared. We calculate 25,000 multiplied by 1.1664, which results in Rs. 29,160.

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