Question

10. Arun took a loan of 390625 from Kuber Finance. If the company charges interest at 16%
per annum, compounded quarterly, what amount will discharge his debt after one year?10. Arun took a loan of 390625 from Kuber Finance. If the company charges interest at 16%
per annum, compounded quarterly, what amount will discharge his debt after one year?​

Answer 1

Answer:

A = 456976  

Arun will have to pay Rs. 456976 after 1 year to discharge his debt.

Step-by-step explanation:

Principal = Rs. 390625

As the interest is compounded quarterly @ 16 % per annum, the rate of interest will be 1/4th of 16 %

R = 16/4 = 4 %

Time is 1 year and there are 4 quarters in a years.

So,  

T = 4

A = P(1 + R/100)ⁿ

A = 390625(1 + 4/100)⁴

A = 390625 × 104/100 × 104/100 × 104/100 × 104/100

A = 390625 × 1.04 × 1.04 × 1.04 × 1.04

A = 456976  

Therefore, Arun will have to pay Rs. 456976 after 1 year to discharge his debt.