Question

Aditya borrowed ₹ 30,000 from a bank to buy a Washing machine at a rate of 10% interest p.a. compounded yearly. What amount will he pay at the end of 2 years and 4 months to clear the loan?

Answer 1

Time is 2 years and 4 months = 28 months or 2 + $\frac{1}{3}$ years

First we will calculate the compound interest for 2 years

A = ${[1+\frac{R}{100}]}^n$

A = 30,000 ${[1+\frac{10}{100}]}^2$

A = 30,000 ${\left[\frac{11}{10}\right]}^2$

A = ₹ 36,300

Taking this amount as principal, now we will calculate simple interest on ₹ 36,300 for $\frac{1}{3}$ years.

SI = 36,300 × $\frac{10}{100}$ × $\frac{1}{3}$ = ₹ 1210

Therefore, total amount to be paid in order to clear the loan is ₹ 36,300 + ₹ 1210 = ₹ 37,510