Rs. 2100 is lent at compound interest of 5% per annum for 2 years. Find the amount after two years.
Question
Rs. 2100 is lent at compound interest of 5% per annum for 2 years. Find the amount after two years.
Solution
Sure, here is the step by step solution:
Step 1: Identify the given values. Principal (P) = Rs. 2100 Rate of interest (r) = 5% per annum = 5/100 = 0.05 Time (t) = 2 years
Step 2: Use the formula for compound interest to calculate the amount (A) after two years. The formula for compound interest is A = P(1 + r/n)^(nt), where n is the number of times interest is compounded per year. In this case, we'll assume n = 1 as it is not specified.
Step 3: Substitute the given values into the formula. A = 2100(1 + 0.05/1)^(1*2) A = 2100(1 + 0.05)^2 A = 2100(1.05)^2
Step 4: Calculate the amount. A = 2100 * 1.1025 A = Rs. 2315.25
So, the amount after two years will be Rs. 2315.25.
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