Question

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

• A. ₹37,545
• B. ₹46,659.7
• C. ₹36,659.7
• D. ₹36,660

Answer 1

The correct option is C

₹36,659.7

Time is 2 years and 4 months = 28 months or $2\frac{1}{3}$ years
Principal, $P=$ ₹26,400
Rate of interest, $r=15\%$

First we will calculate the compound interest for 2 years.

Amount, $A=P{[1+\frac{r}{100}]}^n$
$=26,400{[1+\frac{15}{100}]}^2$
$=26,400{[1+\frac{3}{20}]}^2$
$=26,400{\left[\frac{23}{20}\right]}^2$
$=₹34,914$

Taking this amount as principal, now we will calculate simple interest on ₹34,914 for $\frac{1}{3}$ years​.

Simple interest, $S.I.=34914\times \frac{15}{100}\times \frac{1}{3}=₹1745.7$

Therefore, total amount to be paid in order to clear the loan is $₹34,914+₹1745.7=₹36,659.7$