Arun borrowed a sum of Rs. 9,000 from Jayanthi at 10% rate of compound interest per annum, compounded annually. Find the total amount paid by Arun after 2 years to clear all dues.

Correct option is B

Given :

P = 9,000 (Principal amount borrowed),

r = 10% (rate if Interest),

t = 2 year (Time Period)

Formula used: 

A = P ( 1 + $$\frac{r}{100}$$ ) ^t 

A = principle  + interest

P = Principle

Solution: 

​​$$A = 9000 ( 1 + \frac{10}{100})^2$$ 

​$$A = 9000 (1 + 0.1)^2$$ 

​$$A = 9000 \times (1.1)^2$$ 

$$A = 9000 \times 1.21$$ 

​$$A = 10,890$$ 

The total amount Arun has to pay after 2 years is Rs. 10,890.