Question

Kamala borrowed ₹ 26,400 from a bank to buy a scooter at a rate of 15% p.a. compounded yearly. What amount will she pay at the end of 2 years and 4 months to clear the loan?

• A. ₹ 38,659.70
• B. ₹ 40,659.70
• C. ₹ 36,659.70
• D. ₹ 34,659.70

Answer 1

The correct option is C

₹ 36,659.70

Here, Principal (P) = ₹ 26,400, Time (n) = 2 years 4 months, Rate of interest (R) = 15% p.a
Amount for 2 years (A)
$=P{(1+\frac{R}{100})}^n=26400{(1+\frac{15}{100})}^2=26400{(1+\frac{3}{20})}^2=26400{\left(\frac{23}{20}\right)}^2=26400\times \frac{23}{20}\times \frac{23}{20}$
$=₹34,914$

We shall now calculate the interest for 4 months(=$\frac{4}{12}years=\frac{1}{3}$ years)

We know that S.I. = $\frac{PRT}{100}$

where, S.I. is the simple interest, P is the principal, R is the rate of interest per annum and T is the time(number of years).

Interest for 4 months at the rate of 15% per annum = $\frac{34914\times 15\times 1}{3\times 100}$ = ₹ 1745.70
$\therefore$Total amount = ₹ 34,914 + ₹ 1745.70 = ₹ 36,659.70