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Question

You deposit ₹ 400 in a bank account at 5% interest compunded annually. How much amount would you have obtained after 2 years?

A
₹ 420
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B
₹ 430
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C
₹ 441
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D
₹ 461
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Solution

The correct option is C ₹ 441

Interest for 1st year:
I=P×1×R100

I=400×1×5100

I= 20

Amount after 1 year
= ₹ 400 + ₹ 20
= ₹ 420

Interest after 2nd year:
I=P×1×R100

I=420×1×5100

I= 21

Amount after 2nd year
= ₹ 420 + ₹ 21
= ₹ 441


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