Question:medium

What will Rs 500 amounts to in 10 years after its deposit in a bank which pays annual interest rate of 10% compounded annually?

Updated On: Jan 21, 2026
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Solution and Explanation

It is given that the principal amount is Rs 500.

Rate of interest = 10% per annum.

Time = 10 years.

Since the interest is compounded annually, the amount is given by the formula:

\[ A = P\left(1 + \frac{R}{100}\right)^n \]

Substituting the given values:

\[ A = 500\left(1 + \frac{10}{100}\right)^{10} \]

\[ A = 500(1.1)^{10} \]

\[ A = 500 \times 2.593742 \]

\[ A \approx 1296.87 \]

Thus, Rs 500 will amount to approximately Rs 1296.87 after 10 years.

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