Question

How much will 80,000 amount to in $2\frac{1}{2}$ years if the interest rate is $8$% p.a. compounded annually?

Answer 1

We have,

$P=80,000$

$T=\frac{5}{2}years$

$R=8\%$

$A=?$

We know that

$A=P{(1+\frac{R}{100})}^T$

Therefore,

$A=80000{(1+\frac{8}{100})}^{\frac{5}{2}}$

$A=80000{\left(\frac{108}{100}\right)}^{\frac{5}{2}}$

$A=80000\times \frac{108}{100}\times \frac{108}{100}\times {\left(\frac{108}{100}\right)}^{\frac{1}{2}}$

$A=8\times 108\times 108\times \left(\frac{\sqrt{108}}{10}\right)$

$A=Rs.96,972.67$

Hence, this is the answer.