Question

Apili has shs20000000 on her fixed deposit account in a bank. The bank gives a compound interest interest at a rate of 4% per annum. Calculate the amount Apili will receive after 2 years

Answer 1

The amount Apili will receive after 2 years is Rs 21,632,000.

Step-by-step explanation:

We are given that Apili has Rs 20,000,000 on her fixed deposit account in a bank. The bank gives a compound interest interest at a rate of 4% per annum.

Let P = Principal sum of money

     R = Rate of interest

     T = Time period

     A = Amount of money

As we know that the formula for calculating amount in case of compound interest is given by;

                  $\text{Amount}=\text{Principal} \times (1+\text{Rate of interest})^{\text{Time}}$

                                               Or

                             $A=P\times (1+R)^{T}$

Now, in the question we are provided with P = Rs 20,000,000 , R = 4% p.a. and Time period, T = 2 years.

So, putting values in above equation we get;

                            $A=20,000,000\times (1+\frac{4}{100} )^{2}$

                            $A=20,000,000\times (1+0.04 )^{2}$

                            $A=20,000,000\times (1.04 )^{2}$

                            $A=20,000,000\times 1.0816$

                            A  =  Rs 21,632,000

Therefore,  the amount Apili will receive after 2 years is Rs 21,632,000.