1. **Problem statement:** The cost of a laptop was 800 two years ago. Its price increases by 10% annually due to inflation. We need to find the current price after 2 years. 2. **Formula used:** The price after $n$ years with an annual increase rate $r$ is given by the compound interest formula: $$ P = P_0 (1 + r)^n $$ where: - $P_0 = 800$ (initial price), - $r = 0.10$ (10% annual increase), - $n = 2$ (number of years). 3. **Calculation:** $$ P = 800 \times (1 + 0.10)^2 = 800 \times (1.10)^2 = 800 \times 1.21 = 968 $$ 4. **Explanation:** We multiply the initial price by $1.10$ twice (once for each year) to account for the 10% increase each year. This results in a total increase of 21% over two years. 5. **Final answer:** The current price of the laptop is **968**. Therefore, the correct choice is **D) 968**.