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# What will Rs 500 amounts to in 10 years after its deposit in a bank which pays annual interest rate of 10% compounded annually?

31.  What will Rs 500 amounts to in 10 years after its deposit in a bank which pays annual interest rate of 10% compounded annually?

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Given: Bank pays an annual interest rate of 10%  compounded annually.

Rs 500 amounts are deposited in the bank.

At the end of the first year, the amount

$=500\left ( 1+\frac{1}{10} \right )=500(1.1)$

At the end of the second year, the amount $=500(1.1)(1.1)$

At the end of the third year, the amount $=500(1.1)(1.1)(1.1)$

At the end of 10 years, the amount $=500(1.1)(1.1)(1.1)........(10times)$

$=500(1.1)^{10}$

Thus, at the end of 10 years, amount $=Rs. 500(1.1)^{10}$

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