Question

What total amount will Ravi get in $3$ years if he invests $Rs5000$ at $5\%$ per annum, compounded annually ?

Answer 1

If the principal ${}^{\prime }{P}^{\prime }$ is compounded annually at a rate of $r$% p.a. for $n$ years, the amount accumulated is :

$A=P{(1+\frac{r}{100})}^n$

Now,

$P=5000$

$r=5$% p.a

$t=3$

$\therefore$ $A=5000{(1+\frac{5}{100})}^3$

$=5000\times {(1+\frac{1}{20})}^3$

$=5000\times \frac{21\times 21\times 21}{20\times 20\times 20}$

$=\frac{5}{8}\times 21\times 21\times 21$

$=Rs.5788.125$

so, Ravi will get $Rs.5788.125$ as total amount after 3 years.