₱10,000 is deposited at 10% interest compounded annually. How much is in the account after 2 years?
Correct answer: C. ₱12,100
Year 1: ₱10,000 + ₱1,000 = ₱11,000. Year 2: ₱11,000 + ₱1,100 = ₱12,100. With compounding, the second year's interest is earned on the first year's interest too, so the total exceeds the simple-interest amount of ₱12,000.
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