Kamala borrowed Rs 26400 from a Bank to buy a scooter at a rate of 15% p.a. compounded yearly.
Kamala borrowed Rs 26400 from a Bank to buy a scooter at a rate of 15% p.a. compounded yearly. What amount will she pay at the end of 2 years and 4 months to clear the loan?
(Hint: Find A for 2 years with interest is compounded yearly and then find SI on the 2nd year amount for 4/12 years.)
1 Answers
Principal (P) = Rs 26,400
Rate (R) = 15% per annum
Number of years (n) = 2 4/12 years
The amount for 2 years and 4 months can be calculated by first calculating the amount for 2 years using the compound interest formula, and then calculating the simple interest for 4 months on the amount obtained at the end of 2 years. Firstly, the amount for 2 years has to be calculated.
A = Rs [26400 (1 + 15/100)2]
= Rs [26400 (1 + 3/20)2]
= Rs [26400(20 + 3/20)2]
= Rs (26400 x 23/20 x 23/20)
= Rs 34914
By taking Rs 34,914 as principal, the S.I. for the next 1/3 years will be calculated.
S.I = Rs [(34914 x 1/3 x15)/100]
= Rs (34914 x 5/100)
= Rs 1745.70
Interest for the first two years = Rs (34914 − 26400) = Rs 8,514
And interest for the next 1/3 year = Rs 1745.70
Total C.I. = Rs (8514 + Rs 1745.70) = Rs 10,259.70
Amount = P + C.I. = Rs 26400 + Rs 10259.70 = Rs 36,659.70