Question

By using the formula, find the amount and compound interest on:

Neha borrowed Rs 24000 from the State Bank of India to buy a scooter. If the rate of interest be $10\%$ per annum compounded annually. What payment will she have to make after 2 years 3 months ?

Answer 1

$\text{Amount borrowed from Bank}\left(P\right)=Rs.24000\text{Rate (R)}=10\%p.a.\text{Period (n) = 2 years 3 months}=2\frac{1}{4}years\therefore \text{Amount after the period (A)}=P{(1+\frac{R}{100})}^n=Rs.24000{(1+\frac{10}{100})}^2(1+\frac{10\times 1}{100\times 4})=Rs.24000\times {\left(\frac{11}{10}\right)}^2\left(\frac{41}{40}\right)=Rs.24000\times \frac{11}{10}\times \frac{11}{10}\times \frac{41}{40}=Rs.29766$