Question

Kamala borrowed $Rs.26400$ from a bank to buy a scooter at a rate of $15\%$ per annum compounded yearly. What amount will she pay at the end of $2$ years and $4$ months to clear the loan

Answer 1

Given: $P=26400,R=15$%, $T=2$ years $4$ months

For the first $2$ years

$Amount=P{(1+\frac{r}{100})}^T$

$=26400{(1+\frac{15}{100})}^2$

$=26400(1.15{)}^2=30360$

Now this amount will be principle for the calculation of interest for the next $4$ months (since it is compound interest)

$P^{\prime }=30360,R=15$%, $T=4$months $=\frac{4}{12}$ years $=\frac{1}{3}$

$Interest=\frac{P^{\prime }RT}{100}$

$=\frac{(30360\times 15\times \frac{1}{3})}{100}$

$Interest=1518$

$Totalamount=P^{\prime }+Interest=30360+1518=Rs.31878$

$\therefore$ Kamala should pay $Rs.31878$ to repay the loan after $2$ years and $4$ months.