Question

Mr. Lalit invested $Rs5000$ at a certain rate of interest, compounded annually for two years. At the end of first it amounts to $Rs5325$. Calculate.
The amount at the end of second year, to the nearest rupee.

Answer 1

P$=5000$

Amount at the end of first year$=5325$

S.I$=$A$-$P

$=5325-5000$

$=325$

Therefore,

Amount at the end of the second year $a{\left(1+\frac{r}{100}\right)}^2$

$\begin{array}{c}=5000{\left(1+\frac{6.5}{1000}\right)}^2\\ =5000\times \frac{1065}{1000}\times \frac{1065}{1000}\\ =213\times \frac{213}{8}\\ =\frac{45399}{8}\\ =5671\end{array}$

Hence,

The amount at the end of second year is $Rs5671$.