 Hello and welcome to the session. In this session, we are going to discuss the following question. The question says that $8000 is lent at 5% compound interest per year for two years. Find the amount and the compound interest. Before we start the solution, we shall review a few formulas that are to be used in this question. The simple interest is equal to P into R into T upon 100 where P is equal to the principal, R is equal to the rate of interest and T is equal to time in years. Amount is equal to principal plus interest and compound interest is equal to amount minus principal. With this key idea, we shall proceed with the solution. According to the question, $8000 is lent at 5% compound interest per year for two years. We need to find the amount and the compound interest. To find the compound interest for two years, we will first find the simple interest per year where the principal for every year will be the amount at the end of the previous year. Then at the end, the compound interest will be the amount at the end of the term that is two years minus the original principal. Principal for first year is equal to $8000. As simple interest is equal to P into R into T upon 100, therefore interest for the first year is equal to $8000 into 5 into 1 upon $100 where $8000 is the principal, 5 is the rate of interest and 1 is the time. So this is equal to $80 into 5 which is equal to $400. Now the amount at the end of first year is equal to the principal plus the interest for the first year. That is $8000 is the principal and $400 is the interest for the first year. So amount at the end of first year is equal to $8000 plus $400 which is equal to $8400. Now the principal for second year is equal to the amount at the end of first year that is equal to $8400. So the interest for second year is equal to $8400 into 5 into 1 upon $100 which is equal to $84 into 5 that is $420. Now amount at the end of second year is equal to principal plus interest which is equal to $8400 plus $420 that is equal to $8,820. Now compound interest is equal to the amount at the end of second year minus the original principal. Therefore we have compound interest is equal to $8,820 minus $8000 where $8,820 is the amount at the end of second year and $8000 is the original principal. So this is equal to $820. So finally we have the amount at the end of two years is equal to $8,820 and the compound interest is equal to $820. This is our answer. This completes our session. Hope you enjoyed this session.