Question

Ramu borrowed Rs 15625 from a finance company to buy a scooter. If the rate of interest be 16% per annum compounded annually, what payment will he have to make after $2\frac{1}{4}$ years?

Answer 1

$$\begin{gathered} \mathrm{Given}: \\ \mathrm{P}=\mathrm{Rs}15,625 \\ \mathrm{R}=16\%\mathrm{p}.\mathrm{a}. \\ \mathrm{n}=2\frac{1}{4}\mathrm{years} \\ \therefore \mathrm{Amount}\mathrm{after}2\frac{1}{4}\mathrm{years}=\mathrm{P}{\left(1+\frac{\mathrm{R}}{100}\right)}^2\left(1+\frac{{\displaystyle \frac{1}{4}}\left(\mathrm{R}\right)}{100}\right) \\ =\mathrm{Rs}15,625{\left(1+\frac{16}{100}\right)}^2\left(1+\frac{{\displaystyle \frac{16}{4}}}{100}\right) \\ =\mathrm{Rs}15,625{\left(1.16\right)}^2\left(1.04\right) \\ =\mathrm{Rs}21,866 \\ \mathrm{Thus},\mathrm{the}\mathrm{required}\mathrm{amount}\mathrm{is}\mathrm{Rs}21,866. \end{gathered}$$