Question

Kamala borrowed Rs 26,400 from a bank to buy a scooter at a rate of 15% interest p.a. compounded yearly. So she will have to pay an amount of Rs.36659.7 at the end of 2 years and 4 months to clear the loan.

• A. Rs.36659.7
• B. False

Answer 1

The correct option is A Rs.36659.7

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

A = $26400{[1+\frac{15}{100}]}^2$

A = Rs 34914

Taking this amount as principal, now we will calculate simple interest on Rs 34914 for $\frac{1}{3}$ years​.

SI = 34914 × $\frac{15}{100}$ × $\frac{1}{3}$ = Rs 1745.7

Therefore, total amount to be paid in order to clear the loan is Rs 36659.7