Question

Ratna obtained a loan of Rs 25000 from the Syndicate Bank to renovate her house. If the rate of interest is $8\%$ per annum, what amount will she have to pay to the bank after 2 years to discharge her debt ?

Answer 1

$\text{Amount of loan (p) = Rs. 25000}\text{Rate of interest (r) =}8\%p.a.\text{Period (t) = 2 years}\text{Interest for the first year}=\frac{prt}{100}=Rs.\frac{25000\times 8\times 1}{100}=Rs.2000\therefore \text{Amount at the end of first year}=Rs.25000+Rs.2000=Rs.27000\text{Principal for the second year = Rs 27000}\text{Interest for the second year = Rs.}\frac{27000\times 8\times 1}{100}=Rs.2160\therefore \text{Amount at the end of second year Rs. 27000+Rs. 2160 = Rs. 29160}\therefore \text{She would repay her debt = Rs. 29160}$