Question : A invested an amount of Rs. 12,000 in a fixed deposit scheme for 2 years at an interest rate of 5% per annum, compounded annually. How much amount will A get on maturity of the fixed deposit?
Option 1: Rs. 13,230
Option 2: Rs. 11,280
Option 3: Rs. 12,450
Option 4: Rs. 14,560
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Correct Answer: Rs. 13,230
Solution : When compounded annually, $ A= P(1+\frac{R}{100})^{T}$, Where $A$ is the total amount, $P$ is the principal amount, $R$ is the rate of interest per annum, and $T$ is the time in years. Given: $P$ = Rs. 12,000 $R$ = 5% per annum $T$ = 2 years Substituting these values into the formula, $ A= 12000(1+\frac{5}{100})^{2}$ $ = 12000\times(\frac{21}{20})^{2}$ $ = 12000\times(\frac{441}{400})$ $ = 30\times 441 $ $ = 13230 $ Hence, the correct answer is Rs. 13,230.
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