Question

How much money will ₹ 5000 amount to in 2 years at 10% per annum if the interest is compounded annually? 

pls ans it​

Answer 1

Given :-

Principal = ₹5000

Time = 2 years

Rate = 10%

Solution :-

We know that,

$A\: =\: P\: \bigg(1\: +\: {\dfrac{R}{100}}\:\bigg)^n$

On inserting the values in the formula

We get ,

$A\: =\: 5000\: \bigg(1\: +\: {\dfrac{10}{100}}\:\bigg)^2$

$\implies\: A\: =\: 5000\: \bigg({\dfrac{110}{100}}\bigg)^2$

$\implies\: A\: =\: 5000\: \times\: {\dfrac{110}{100}}\: \times\: {\dfrac{110}{100}}$

$\implies\: A\: =\: 50\: \times\: 11\: \times\: 11$

$\implies\: A\: =\:6050$

Therefore, Amount = ₹6050

Compound interest = Amount - Principal

= ₹(6050 - 5000)

= ₹1050

Therefore, Compound interest = ₹1050