Question

A man borrowed Rs.400000 from a cooperative for 3 years at the rate of 12.5%p.a. annual compound interest but at the end of 2 years, he paid only half of the principal. how much will he need to pay to clear the debt at the end of the next two years at the same rate with semi annual compound interest? find the total interest paid

Answer 1

Answer:

A man borrowed Rs.25000 from a bank at 20% compound interest. At the end of every year he paid 8000. At the end of the third year, he wanted to clear the loan. How much should he pay to clear the loan?

A

12400

B

16040

C

20800

D

22080

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Correct option is

D

22080

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.

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