Question

If the present value of my investment is Rs. $2,000$ and the rate of interest is $5\%$ compounded annually, what will the value be after $5$ years?

• A. $2341.12$
• B. $1348.90$
• C. $2552.56$
• D. $3129.10$

Answer 1

Answer: (C)

$2552.56$

Given, Principal $P=2,000,r=5\%,n=5$ years

We know the formula of compound interest,
$A=P{(1+\frac{r}{100})}^n$
$=2000{(1+\frac{5}{100})}^5$
$=2000{(1+\frac{5}{100})}^5$
$=2000\times {1.05}^5$
$=$ Rs. $2552.56$