Sundar lends a sum of ₹6,000 to Mahesh at an interest rate of 10% p.a., compounded annually. What will be the amount at the end of 2 years?

₹7,160 ₹7,250 ₹7,200 ₹7,260

₹7,260

From the formula for compound interest, we know, Amount = P(1+$\frac{R}{100})^t$–  = 6000 [ 1 + \(\frac{10}{100}\) ]² = 6000 [ \(\frac{11}{10}\) × \(\frac{11}{10}\) ] = 6000 [ \(\frac{121}{100}\) ] = Rs. 7260