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.

Answer 1

Here, Principal $\left(P\right)=Rs.8000$ [Money invested]

Rate of interest $\left(R\right)=5\%$

Time $\left(n\right)=2$ years

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

Amount $\left(A\right)=P{(1+\frac{R}{100})}^n$

$=8000{(1+\frac{5}{100})}^2$

$=8000{(1+\frac{1}{20})}^2$

$=8000{\left(\frac{21}{20}\right)}^2$

$=8000\times \frac{21}{20}\times \frac{21}{20}$

$=Rs.8,820$