Calculation of Compound Interest

To calculate the compound interest, we use the formula:

A = P(1 + r/n)^(nt)

Where:
A = the future value of the investment/loan, including interest
P = the principal investment/loan amount
r = the annual interest rate (in decimal form)
n = the number of times that interest is compounded per year
t = the number of years the money is invested/borrowed for

Given values:
P = Rs 100
r = 5% p.a
n = 1 (compounded annually)
t = 20 years

Step 1: Convert the percentage to a decimal
The interest rate is given as 5%, so we convert it to decimal form by dividing it by 100:
r = 5/100 = 0.05

Step 2: Substitute the values into the formula
Using the compound interest formula, we can substitute the given values:
A = 100(1 + 0.05/1)^(1*20)

Step 3: Simplify the equation
Simplifying the equation, we get:
A = 100(1 + 0.05)^20

Step 4: Calculate the compound interest
Calculating the compound interest, we have:
A = 100(1.05)^20
A = 100(1.05^20)
A ≈ 100(1.63862)
A ≈ 163.862

Answer
After 20 years at a compound interest rate of 5% p.a, Rs 100 will become approximately Rs 163.862.