Question

A man borrowed some money and paid back in $3$ equal instalments of Rs. $2160$ each. The rate of interest charged was $20\%$ p.a .compounded annually. Find the total interest charged in Rs.(approximately).

• A. $1928$
• B. $1980$
• C. $1930$
• D. $1954$

Answer 1

The correct option is C $1930$

$\Rightarrow$ We have, $A=Rs.2,160,n=3andr=20\%$

$\Rightarrow$ First we have to find Sum borrowed i.e. $V$.

$\Rightarrow$ Using, $V=\frac{A}{r}[1-(1+r{)}^{-n}]$

$\Rightarrow$ $V=\frac{2160}{0.2}[1-(1.2{)}^{-3}]$

$\Rightarrow$ $V=10800[1-\frac{1000}{(12{)}^3}]$

$\Rightarrow$ $V=10800\left[\frac{(1728-1000)}{1728}\right]$

$\Rightarrow$ $V=\frac{10800\times 728}{1728}$

$\Rightarrow$ $V=Rs.4550$.

$\Rightarrow$ Total interest = $(A\times n)-V=2160\times 3-4550=Rs.1930$