Given,
Principal (P) = Rs. 5000
Rate of interest (R) = 12% p.a.
Time (T) = 2years
To find Compound interest (C.I)
By formula,
\(C.I\;=\;p\left\{(1\;+\;\frac R{100})^T-1\right\}\)
= \(Rs.5000\left\{(1\;+\;\frac{12}{100})^2-1\right\}\)
=Rs. 5000 {(1 + 0.12)2 -1}
=Rs. 5000 (1.2544 - 1}
=Rs. 5000 x 0.2544
=Rs. 1272.
Therefore, Compound interest in 2 years (C.I.) = Rs.1272.