#### Find the amount and the compound interest on ₹ 2000 at 10% p.a. for 2 years, compounded annually.

**Solution:**

It is given that

Principal (P) = ₹ 2000

Rate of interest (r) = 10% p.a.

Period (n) = 2 ½ years

We know that

Amount = P (1 + r/100)^{n}

Substituting the values

= 2000 (1 + 10/100)^{2} (1 + 10/(2 × 100))

By further calculation

= 2000 × 11/10 × 11/10 × 21/20

So we get

= ₹ 2541

Here

Interest = A – P

Substituting the values

= 2541 – 2000

= ₹ 541

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