Question

A man borrowed Rs 400000 from a bank to buy a tractor. Find the amount he would pay after 3 years 6 months at 10% per annum.​

Answer 1

Answer:

Compound Interest is nothing but Simple interest per year with the amount at the end of every year being the principal for the next year.

For the first year ,

Simple Interest SI=

100

PNR

So, SI=

100

25000×1×20

=Rs5000

So, Amount A=25000+5000=Rs30000

For the second year ,

P =30000−8000=Rs22000

So, SI=

100

22000×1×20

=Rs4400

So, Amount A=22000+4400=Rs26400

For the third year ,

P =26400−8000=Rs18400

So, SI=

100

18400×1×20

=Rs3680

So, Amount A=18400+3680=Rs22080

So, Rs22080 has to paid off to clear the loan.