3. Mr Vijay borrows +10000 for 4 years with the
following agreement:
years
(1) 10% simple interest for the first 2
(ii) 10% compound interest for the remaining
period on the amount due after 2
2
years, the interest being compounded
semi-annually.
Calculate the total amount Vijay has to
pay at the end of 4 years
Answers
Answer:
Interest is the extra money paid by institutions like banks or post offices on money deposited (kept) with them. Interest is also paid by people when they borrow money.
With Simple interest, the interest is calculated on the same amount of money in each time period, and, therefore, the interest earned in each time period is the same. i.e., If the interest on a sum borrowed for certain period is reckoned uniformly, then it is called simple interest.
Let the principal = P, Rate = R% per annum (p.a) and Time = T years. Then ,
Example - 1
A sum of Rs 10,000 is borrowed at a rate of interest 15% per annum for 2 years. Find the simple interest on this sum and the amount to be paid at the end of 2 years.
Solution :
On Rs 100, interest charged for 1 year is Rs 15.
So, on Rs 10,000, interest charged =
Amount to be paid at the end of 2 years = Principal + Interest
Step-by-step explanation:
I hope it may help you