Question

Arif took a loan of $\text{Rs.}80,000$ from a bank. If the rate of interest is $10\%$ per annum, find the amounts he would be paying after $1\frac{1}{2}$ years if the interest is compounded annually.

Answer 1

i)

$A=P{(1+\frac{r}{100})}^n\times (1+\frac{br}{100})=80000{(1+\frac{10}{100})}^{\left(1\right)}\times (1+\frac{0.5\times 10}{100})=80000\left(1.1\right)\left(1.05\right)=92400$

Amount $=Rs.92,400$

ii)

$A=P{(1+\frac{r}{200})}^{2n}\times (1+\frac{br}{100})=80000{(1+\frac{10}{200})}^{(2\times 1)}\times (1+\frac{0.5\times 10}{100})=80000\left(1.1025\right)\left(1.05\right)=92610$

Amount $=Rs.92,610$

Difference $=Rs.210$