Question

Reema took a loan of Rs 8000 from a money lender, who charged interest at the rate of 18% per annum. After 2 years, Reema paid him Rs 10400 and wrist watch to clear the debt. What is the price of the watch?

Answer 1

Principal amount (P) = Rs 8,000
Rate of interest (R) = 18%
Time period (T) = 2 years
Interest after 2 years = $\frac{P\times R\times T}{100}=\frac{8000\times 18\times 2}{100}$ = Rs 2,880
Total amount payable by Reema after 2 years = Rs 8,000 + Rs 2,880 = Rs 10,880
Amount paid = Rs 10,400
Value of the watch = Rs 10,880 − Rs 10,400 = Rs 480