4. Ashok borrows 20,000 from a bank at 12.5% p.a. simple interest for 2 years. Out
of the sum borrowed, he lends 12,000 to Sushil at 15% p.a, simple interest for
1
1 years. Calculate:
(i) the interest charged by the bank:
(ii) the interest earned by Ashok;
(iii) the amount paid by Sushil to Ashok:
(iv) the amount paid by Ashok to the bank to clear the debt.
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Answer:
Given: Principal for the first year (P)=Rs.20,000,r=12%
We know that A=P(1+
100
r
)
n
Amount after the first year =20,000(1+
100
12
)
1
=20,000(
100
112
)
=Rs.22,400
Money repays at the end of first year =Rs.8,400 (given)
Principal for the second year =Rs.22,400−Rs.8,400
=Rs.14,000
Amount after second year =14,000(1+
100
12
)
1
=Rs.15,680
∴ The loan outstanding at the beginning of the third year
=Rs.15,680−Rs.9,680
=Rs.6,000
Step-by-step explanation:
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