Compound Interest Calculation for Fixed Deposit

This problem involves calculating the final amount Mahesh will receive from a fixed deposit after 2 years, considering compound interest.

Key Information

• Principal Amount ($P$): ₹8000
• Rate of Interest ($r$): 5% per annum
• Time Period ($n$): 2 years
• Interest Type: Compound Interest

Formula for Compound Amount

The formula to calculate the amount ($A$) on maturity with compound interest is:

$A = P \times (1 + \frac{r}{100})^n$

Step-by-Step Calculation

1. Substitute values into the formula:

   $A = 8000 \times (1 + \frac{5}{100})^2$

2. Simplify the term inside the parenthesis:

   $1 + \frac{5}{100} = 1 + 0.05 = 1.05$

   So the formula becomes:

   $A = 8000 \times (1.05)^2$

3. Calculate the square of the term:

   $(1.05)^2 = 1.1025$

   Now the formula is:

   $A = 8000 \times 1.1025$

4. Calculate the final amount:

   $A = 8820$

Maturity Amount

Mahesh will receive ₹8820 on the maturity of the fixed deposit.