Question

Meera borrowed a sum of Rs. 1000 from Sita for two years. If the rate of interest is $10\%$ compounded annually find the amount that Meera has to pay back.

Answer 1

Amount of loan (P) = Rs. 1000
Rate (R) $=10\%$ p.a
Period (n) = 2 years
$\therefore$ Amount $=P{(1+\frac{R}{100})}^n$
$=Rs.1000{(1+\frac{10}{100})}^2=Rs.1000{\left(\frac{11}{10}\right)}^2$
$=Rs.1000\times \left(\frac{11}{10}\right)\times \left(\frac{11}{10}\right)=Rs.1210$