Final answer:
To calculate the compound amount, use the formula A = P(1 + r/n)^(nt). In this case, the compound amount is approximately Rs 5473.32.
Step-by-step explanation:
To calculate the compound amount, we can use the formula:
A = P(1 + r/n)^(nt)
Where:
- A is the final amount
- P is the initial principal
- r is the interest rate (in decimal form)
- n is the number of times interest is compounded per year
- t is the number of years
In this case, P = Rs 5000, r = 7% or 0.07, n = 12 (since interest is compounded monthly), and t = 2 years.
Plugging in these values, we get:
A = 5000(1 + 0.07/12)^(12*2)
Calculating this gives us an approximate compound amount of Rs 5473.32.