Anil deposited Rs. 8,000 in a two-year fixed deposit scheme on compound interest compounded annually at 5% per annum. Find the maturity value of the fixed deposit.
- ARs. 8,900
- BRs. 8,680
- CRs. 8,820
- DRs. 8,450
Solution & Step-by-step Explanation
The formula for maturity amount with annual compound interest is:
A=P(1+
100
R
)
n
Given:
Principal (P) = Rs. 8,000
Rate (R) = 5%
Time (n) = 2 years
A=8000(1+
100
5
)
2
A=8000(
20
21
)
2
A=8000×
400
441
A=20×441=Rs. 8,820
A=P(1+
100
R
)
n
Given:
Principal (P) = Rs. 8,000
Rate (R) = 5%
Time (n) = 2 years
A=8000(1+
100
5
)
2
A=8000(
20
21
)
2
A=8000×
400
441
A=20×441=Rs. 8,820