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?
Answer & explanation
Correct answer: option 4
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