Given:
Principal value of loan = 55,000
Rate of interest = 5%
Time = 2 year
To find:
The amount after two years.
Solution:
The formula for amount is
[tex]A=P\left(1+\dfrac{r}{100}\right)^t[/tex]
Where, P is principal, r is rate of interest in %, t is time in years.
Putting P=55,000, r=5 and t=2, we get
[tex]A=55000\left(1+\dfrac{5}{100}\right)^2[/tex]
[tex]A=55000\left(1+0.05\right)^2[/tex]
[tex]A=55000\left(1.05\right)^2[/tex]
[tex]A=55000(1.1025)[/tex]
[tex]A=60637.50[/tex]
Therefore, the amount after two years is P60637.50.