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Question

Maria invested Rs. 8,000 in a business. She would be paid interest at 5% per annum compounded annually. Find:
The amount was credited against her name at the end of the second year.

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Solution

Here, Principal (P)=Rs. 8000 [Money invested]

Rate of interest (R)=5%

Time (n)=2 years

The amount that was credited in her account after two years is given by

Amount (A)=P(1+R100)n

=8000(1+5100)2

=8000(1+120)2

=8000(2120)2

=8000×2120×2120

=Rs. 8,820


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