Question

A Woman took a loan of Rs. 15,000 to purchase a mobile. She promised to make the payment after three years. The company charges CI at 20% per annum for the same. But, suddenly the company announces the rate of interest as 25% per annum for the last one year of the loan period. What extra amount she has to pay due to the announcement of new rate of interest?

Answer 1

$15,000\times (1+\frac{20}{100}{)}^2[(1+\frac{25}{100})-(1+\frac{20}{100})]$

$=15,000\times \left(\frac{120}{100}{)}^2\right[\frac{125}{100}-\frac{120}{100}]$

$=15000\times \frac{144}{100}\times \frac{5}{100}=15\times 72=1080$