What will be the total amount payable on a sum of Rs.12,500 after two years at the rate of 10% per annum if the interest is compounded annually?

Correct option is C

Given:

Principal (P) = ₹12,500

Rate (R) = 10% per annum

Time (T) = 2 years

Formula Used:

A = P $$\left(1 + \frac{R}{100} \right)^T$$​

Solution:

A = $$12500 \left(1 + \frac{10}{100} \right)^2$$​​

A = $$12500 \left( \frac{110}{100} \right)^2$$​​

A = $$12500 \left( \frac{110}{100} \right) \left( \frac{110}{100} \right)$$​​

A = $$125 \times11 \times11$$​​

A = 15,125 

Alternate Method:  

10%

Total CI = 12500 + 1250 + 1250 + 125 = 15125