Question

Apoorva borrowed 2000 at 5% per annum compounded annually, what will be the amount
payable at the end of two years?​

Answer 1

Answer:

Amount payable at the end of two years is Rs.2,205

Step-by-step explanation:

Let P = initial amount = Rs.2000

R = rate of interest per cent per year = 5%

T = time in years = 2

A = final amount

Now:

A = P*(1 + R/100)^T            (Annual compounding)

Thus,

A = 2000*(1+5/100)^2

   = 2000*(1.05)^2

   = 2000*1.1025

   = 2205

Amount at end of two years = Rs.2,205