The compound inte A. Rs. 550

B. Rs. 1050

C. Rs. 950

D. Rs. 825

Present value = Rs.5000

Interest rate = 10% per annum

Time = 2 years

Amount (A) = P (1 + R/100)ⁿ [Where, P = Present value

R = Annual interest rate

n = Time in years]

∴ A = 5000 (1 + 10/100)²

⇒ A = 5000 (1 + 1/10)²

⇒ A = 5000 (11/10)²

⇒ A = 5000 × 11/10 × 11/10

⇒ A = 5000 × 121/100

⇒ A = 50 × 121

⇒ A = 6050

∴ Amount = Rs.6050

∴ Compound interest = Rs.(6050 – 5000)

= Rs.1050