To calculate the sum you will get back after 10 years with compound interest, we can use the formula for compound interest:
A = P (1 + r/n)^(nt)
Where:
A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested or borrowed for
In your case, the principal P is Rs. 1 lakh, the annual interest rate r is 18%, and the time t is 10 years. Since the interest is compounded yearly, n is 1.
Let's plug these values into the formula:
A = 100,000 * (1 + 0.18/1)^(1*10)
A = 100,000 * (1 + 0.18)^10
A = 100,000 * (1.18)^10
Now we calculate (1.18)^10:
A = 100,000 * 5.4231 (rounded to 4 decimal places for the purpose of this calculation)
Finally, we multiply the principal amount by this factor:
A = 100,000 * 5.4231
A = 542,310
So, the sum that you would get back after 10 years would be Rs. 542,310 rounded to whole rupees. If you need the answer up to 2 decimal places (which is unusual for money but for the sake of instruction), it would be Rs. 542,310.00.
