Question

Find the amount of money Shekhar will get at the end of 5 years if he invests ₹ 1000 in a bank with an interest rate of 20% compounded annually.

• A. ₹ 2488.32
• B. ₹ 2886
• C. ₹ 1374.50
• D. ₹ 2500

Answer 1

The correct option is A ₹ 2488.32

Given
Principal = ₹ 1000
Time period (n) = 5 years
Interest rate (r) = 20%

By using formula for compound interest, we can write

$\text{Amount = P}\left[{(1+\frac{r}{100})}^n\right]$

$\text{Amount}=1000\left[{(1+\frac{20}{100})}^5\right]$

$\text{Amount}=₹2488.32$