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Commercial arithmetic II: Compound interest calculation

Answer Text:
Compound Interest

Suppose you deposit money into a financial institution, it earns interest in a specified period of time. Instead of the interest being paid to the owner it may be added to (compounded with) the principle and therefore also earns interest. The interest earned is called compound interest.
The period after which it’s compounded to the principle is called interest period.
The compound interest maybe calculated annually, semiannually, quarterly, monthly etc. If the rate of compound interest is R% p. a and the interest is calculated n times per year, then the rate of interest per period is #( R/n )%#
The formula used is:
#A = P (1 + r/100)t#
Where A = Amount
P = Principal
R = Rate % per annum
T = Time A = P + CI
P (1 + 𝑟 100 ) t = P + CI

Example 1
What will be the compound interest on ksh 31250 at a rate of 4% per annum for 2 years?

Example 2.
A sum amounts to ksh. 24200 in 2 years at 10% per annum compound interest. Find the sum?