Question 46

What will Rs. 1000 be worth after three yearsif it earns interest at the rate of 5% compounded annually?

Solution

Principal = Rs. 1000 and rate of interest = 5% and time period = 3 years

=> Amount when compounded annually = $$P(1+\frac{r}{100})^t$$

= $$1000(1+\frac{5}{100})^3$$

= $$1000\times(\frac{21}{20})^3$$

$$\approx Rs.$$ $$1157$$

=> Ans - (C)

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