Question

Megha lended Rs.$8000$ as a loan for $4$ years at the rate $4\%$ compounded annualy. Calculate the interest she will recive by the method of simple interest.

• A. $8963.26$
• B. $9358.86$
• C. $1358.86$
• D. $9863.25$

Answer 1

The correct option is C $1358.86$

$P=8000,R=4$%, $T=4$

Interest in $1$st year$=\frac{P\times R\times T}{100}$

$=\frac{8000\times 4\times 1}{100}$

$=320$

Now, Principal amount will be $(P+320)$ since the interest in compounded annually.

Interest in $2$nd year$=\frac{P^{{}^{\prime }}\times R\times T}{100}$

$=\frac{8320\times 4\times 1}{100}$

$=332.8$

Now, $P^{\prime \prime }=332.8+P^{\prime }$

Interest in $3$rd year$=\frac{8652.8\times 4\times 1}{100}=346.112$

Interest in $4$th year$=\frac{(346.112+8652.8)\times 4\times 1}{100}=359.956$

Total interest$=320+332.8+346.112+359.95$

$=1358.86$