Question

Kamala borrowed Rs 26400 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?

(Hint: Find A for 2 years with interest is compounded yearly and then find SI on the 2^nd year amount for years.)

Answer 1

Principal (P) = Rs 26,400

Rate (R) = 15% per annum

Number of years (n) =

The amount for 2 years and 4 months can be calculated by first calculating the amount for 2 years using the compound interest formula, and then calculating the simple interest for 4 months on the amount obtained at the end of 2 years.

Firstly, the amount for 2 years has to be calculated.

By taking Rs 34,914 as principal, the S.I. for the nextwill be calculated.

Interest for the first two years = Rs (34914 − 26400) = Rs 8,514

And interest for the nextyear = Rs 1,745.70

Total C.I. = Rs (8514 + Rs 1745.70) = Rs 10,259.70

Amount = P + C.I. = Rs 26400 + Rs 10259.70 = Rs 36,659.70