Question

Rajesh borrowed ₹30,000 from a bank to buy a Washing machine at a rate of 10% interest p.a. compounded yearly. What amount will he pay at the end of 2 years and 3 months to clear the loan?

• A. ₹37,207.5
• B. ₹37,104.75
• C. ₹37,407.5
• D. ₹39,207.5

Answer 1

The correct option is A ₹37,207.5

Time is 2 years and 3 months = 27 months or 2 + $\frac{1}{4}$ years

First we will calculate the compound interest for 2 years

A = ${[1+\frac{R}{100}]}^n$

A = 30,000 ${[1+\frac{10}{100}]}^2$

A = 30,000 ${\left[\frac{11}{10}\right]}^2$

A = ₹36,300

Taking this amount as principal, now we will calculate simple interest on ₹36,300 for $\frac{1}{4}$ years.

SI = 36,300 × $\frac{10}{100}$ × $\frac{1}{4}$ = ₹907.5

Therefore, total amount to be paid in order to clear the loan is ₹36,300 + ₹907.5 = ₹37,207.5