To calculate the compound interest, we first need to find out the amount after one year and then the final amount after two years.
Amount after one year = Principal + Interest = 1875 + 4% of 1875 = 1875 + 75 = 1950
Amount after two years = Principal + Interest on first year + Interest on second year = 1875 + 75 + 8% of 1950 = 1875 + 75 + 156 = 2106
The final amount after two years is Rs 2106.
The compounded interest can be calculated as the difference between the final amount and the principal amount:
Compounded Interest = Final Amount – Principal = Rs 2106 – Rs 1875 = Rs 231
Therefore, the compounded interest on a sum of Rs 1875 after two years at 4% interest rate for the first year and 8% interest rate for the second year is Rs 231.