Question

$\text{Rs}$ $18,000$ for $2\frac{1}{2}$ years at $10\%$ per annum is compounded annually. Calculate the final amount.

Answer 1

We have,

$P=Rs.18000$

$T=2\frac{1}{2}=\frac{5}{2}years$

$R=10\%$

$A=?$
We know that

$A=P{(1+\frac{R}{100})}^T$

Therefore,

$A=18000{(1+\frac{10}{100})}^{\frac{5}{2}}$

$A=18000{(1+\frac{1}{10})}^{\frac{5}{2}}$

$A=18000{\left(\frac{11}{10}\right)}^{\frac{5}{2}}$

$A=18000\times {\left(\frac{11}{10}\right)}^2\times {\left(\frac{11}{10}\right)}^{\frac{1}{2}}$

$A=18000\times \left(\frac{121}{100}\right)\times {\left(\frac{11}{10}\right)}^{\frac{1}{2}}$

$A=180\times 121\times {\left(\frac{11}{10}\right)}^{\frac{1}{2}}$

$A=\text{Rs.}22843.06$

Hence, this is the answer.