Rs. 10000 for 2 years at 11% per annum compounded annually.
Present value = Rs.10000
Interest rate = 11% 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 = 10000 (1 + 11/100)2
⇒ A = 10000 (111/100)2
⇒ A = 10000 × 111/100 × 111/100
⇒ A = 1 × 111 × 111
⇒ A = 12321
∴ Amount = Rs.12321
∴ Compound interest = Rs.(12321 – 10000)
= Rs.2321