What will Rs 500 amounts to in 10 years after its deposit in a bank which pays annual interest rate of 10% compounded annually?
Given: The amount deposited in bank is rupees 500.
The Compound interest is given by: A = P
Here p: principle, r: interest rate t: time in years, n: number of times interest is compounded in a year.
∴ At the end of first year A = 500
= 500(1.1)
∴ At the end of 10 years A = 500
= 500(1.1)10
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