Find the compound interest when principal = Rs 3000,

Principal for the first year $=$ Rs 3,000

Interest for the first year $=\operatorname{Rs}\left(\frac{3,000 \times 5 \times 1}{100}\right)$

= Rs 150

Amount at the end of the first year $=\mathrm{Rs} 3,000+\mathrm{Rs} 150$

= Rs 3,150

Principal for the second year $=$ Rs 3,150

Interest for the second year $=\operatorname{Rs}\left(\frac{3,150 \times 5 \times 1}{100}\right)$

= Rs 157.50

Amount at the end of the second year $=$ Rs $3,150+$ Rs $157.50$

$=\operatorname{Rs} 3307.50$

$\therefore$ Compound interest $=\operatorname{Rs}(3,307.50-3,000)$

$=\operatorname{Rs} 307.50$