Question

Anagha borrowed Rs.$70,000$ from her friend at the rate of $3.5\%$ p.a.compounded yearly. She returned the amount after three years. So calculate interest of first year and second year .

• A. $Rs.2,450,85.75$
• B. $Rs.2,450,2,450$
• C. $Rs.2,450,2,535.75$
• D. $Rs.2,450,2100$

Answer 1

The correct option is C $Rs.2,450,2,535.75$

$P=70000,R=3.5$%

Interest in $1$st year$=\frac{P\times R\times T}{100}$

$=\frac{70000\times 3.5\times 1}{100}$

$=2450$

Now, $(2450+P)$ will be principal amount for $2$nd year since interest is compounded yearly

Interest in $2$nd year$=\frac{P^{{}^{\prime }}\times R\times T}{100}$

$=\frac{(2450+70000)\times 3.5\times 1}{100}$

$=724.5\times 3.5=2535.75$