Calculate the approximate amount if Rs. 500 is invested on compound interest at rate of 5% per annum for two years.

- Rs 551
- Rs 500
- Rs 450
- Rs 350
- None of these

Option 1 : Rs 551

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**Given **

Principal amount (P) = 500

Rate (r) = 5%,

Time(t) = 2

**Formula**

Amount = P(1 + r/100)^{t}

**Calculations **

Amount = 500 × (1+ 5/100)^{2}

⇒ 500 × (105/100)^{2}

⇒ Rs 551.25 ≈ Rs 551

**∴ Amount received is Rs. 551.**

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