Arun took a loan of Rs 390625 from Kuber Finance. If the company charges interest at $16 %$ per annum, compounded quarterly, what amount will discharge his debt after one year?

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Solution

$Amount taken from finance company (P) =Rs. 390625 Rate of interest (R) = 16 % p . a . o r 4 % quarterly Period (n) =1 year or 4 quarterly ∴ Amount (A) =P {(1 + \frac{R}{100})}^{n} = 390625 {(1 + \frac{4}{100})}^{4} = R s . 390625 \times {(\frac{26}{25})}^{4} = R s . 390625 \times \frac{26}{25} \times \frac{26}{25} \times \frac{26}{25} \times \frac{26}{25} = R s . 456976$

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Arun took a loan of Rs 390625 from Kuber Finance. If the company charges interest at 16% per annum, compounded quarterly, what amount will discharge his debt after one year?

Amount taken from finance company (P) =Rs. 390625Rate of interest (R) =16% p.a. or 4% quarterlyPeriod (n) =1 year or 4 quarterly∴ Amount (A) =P(1+R100)n=390625(1+4100)4=Rs. 390625×(2625)4=Rs. 390625×2625×2625×2625×2625=Rs. 456976

Arun took a loan of Rs 390625 from Kuber Finance. If the company charges interest at $16 %$ per annum, compounded quarterly, what amount will discharge his debt after one year?