Question
Download Solution PDFWhat shall be the amount including compound interest, if Rs. 1500 is invested at the interest rate of 7% in 2 years?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFGiven Data:
Principal amount (P) = Rs. 1500
Interest rate (R) = 7%
Time period (T) = 2 years
Concept or Formula:
The concept or formula used for this calculation will be the formula for compound interest A = P(1+R/100)^T, where A denotes the amount, P is the principal, R the rate of interest per period, and T is the total number of periods.
Solution:
We're supposed to find the amount after 2 years with a compound annual growth rate of 7% on a principal of Rs 1500.
⇒ A = P(1+R/100)T
⇒ A = 1500(1+7/100)2
⇒ A = 1500 × (1.07)2
⇒ A = Rs. 1717.35
Therefore, the correct answer is "Rs. 1717.35"
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