Question

Kamala borrowed $Rs26,400$ 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? (Round answer to nearest whole number)

Answer 1

Principal (P) = $Rs26,400$
Rate (R) = $15\%$ per annum
Number of years (n) = $2\frac{4}{12}$
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.
For calculating amount of first $2$ years,
$\text{Amount = Principal}(1+\frac{R}{100}{)}^{Time}$
$\text{Interest = Amount - Principal}$
$\text{Amount =}26400(1+\frac{15}{100}{)}^2$
$\text{Amount=}34914$
Now, the interest for next $\frac{1}{3}$ years will be calculated using Simple Interest
S.I. = $\frac{(P\times R\times T)}{100}$
S.I. = $\frac{34914\times 15\times \frac{1}{3}}{100}$
S.I. = $1745.70$
Therefore, total amount to be paid after $2$ years and $4$ months = $34,914+1,745.70=Rs36,659.70$

Nearest whole number to $36659.70$ is $36660$.