Question

What will $Rs500$ amounts to in $10$ years after its deposit in a bank which pays annual interest rate of $10\%$ compounded annually?

Answer 1

The amount deposited in bank is $\text{Rs}500.$
At the end of first year , amount= $\text{Rs}500\cdot (1+\frac{1}{10})=\text{Rs}500\left(1.1\right)$
At the end of second year, amount $=\text{Rs}500\left(1.1\right)\left(1.1\right)$
At the end of third year , amount $=\text{Rs}500\left(1.1\right)\left(1.1\right)\left(1.1\right)$ and so on
$\therefore$Amount at the end of 10 years $=\text{Rs}500\left(1.1\right)\left(1.1\right)....\left(10\text{times}\right)=\text{Rs}500{\left(1.1\right)}^{10}$