Question

Babu opened a savings account and deposited Rs. $1200.00$ as principal. The account earns $10\%$ interest, compounded annually. What is the balance after $2\frac{1}{2}$ years?

• A. Rs. $1522.87$
• B. Rs. $1400.67$
• C. Rs. $1456.37$
• D. None of these

Answer 1

The correct option is A Rs. $1522.87$

We know the formula,
$A=P{(1+\frac{r}{100})}^t$
Where,
$A=$ total amount
$P=$ principal or amount of money deposited,
$r=$ annual interest rate
$n=$ number of times compounded per year
$t=$ time in years
Given: $P=$ Rs. $1200,r=10\%$ and $t=$ $2\frac{1}{2}$ years
$A=1200{(1+\frac{10}{100})}^{2.5}$
$A=1200\times {1.1}^{2.5}$
$A=1200\times 1.269059$
$A=$ Rs. $1522.87$