The principal amount in the second year = The accumulated principal at the end of the first year
\(=P\left(1+\cfrac{r}{100}\right)\) rupees.
If the annual compound interest rate is \(r\%\) and the principal amount in the first year is \(P\) rupees, then the principal amount in the second year = \(P\left(1+\cfrac{r}{100}\right)\) rupees.