A man deposits Tk. 500 in a Bank at 10% interest rate compounded annually. At the end of the second year, the total amount including interest will become?

Question: A man deposits Tk. 500 in a Bank at 10% interest rate compounded annually. At the end of the second year, the total amount including interest will become?

Solution:
Given,
Principal, P = 500 Tk.
Rate of interest, r = 10% = 10/100 = 1/10
Time, n = 2 years.

We know,
Compound Amount = P (1 + r)ⁿ
= 500 × (1 + 1/10)²
= 500 × (11/10)²
= 500 × (11/10) × (11/10)
= 605