Question

A farmer borrowed Rs 20,800 from a money lender at 4.5% per annum simple interest. The amount paid by him to clear the loan after a period of 5 years is​

Answer 1

Answer:

Principal= Rs 20800

Rate of interest= 4.5%

Time= 5 yes

A= P(1+R/100) ^t

= 20800(1+4.5/100)^5

= 20800(100+4.5/100)^5

= 20800(104.5/100)^5

= 20800×1.045×1.045×1.045×1.045×1.045

= 25920.5843 (amount)

Thus, the amount is 25920.5843.

Answer 2

Answer:

The amount paid by him to clear the loan after a period of 5 years is​ Rs.25480.

Step-by-step explanation:

For Simple Interest,

• Simple interest is calculated with the following formula:

        S.I. = P × R × T

        where P = Principal,

        R = Rate of Interest in % per annum,

        T = Time, calculated as the number of years.

• The rate of interest R is in percentage i.e., R% and is to be written as R/100.

       Simple Interest S.I.= P × $\frac{R}{100}$ × T,  

       So, S.I.= $\frac{20800*4.5*5}{100}$

​                   =Rs. 4680

• So, Amount A=20,800+4680=Rs. 25480

• Hence, the amount paid by him to clear the loan after a period of 5 years is​ Rs.25480.

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