Question

kuldeep borrowed ₹ 20000 From his friend at 12% per annum simple interest for one year.what amount he will pay to his friend​

Answer 1

Present value = Rs.20000

Interest rate = 12% per annum

Time = 2 years

Simple interest (SI) = PRT/100 [where, P = Present value R = Interest rate, T = Time]

∴ SI = (20000 × 12 × 2)/100

⇒ SI = 200 × 12 × 2

⇒ SI = 4800

Now, Amount (A) = P (1 + R/100)n [Where, P = Present value R = Annual interest rate n = Time in years]

∴ A = 20000 (1 + 12/100)2

⇒ A = 20000 (112/100)2

⇒ A = 20000 (1.12)2

⇒ A = 20000 × 1.2544

⇒ A = 25088

∴ Amount = Rs.25088

∴ Compound interest = Rs.(25088 – 20000) = Rs.5088 Now,

(CI – SI) = 5088 - 4800 = Rs.288

∴ The amount of money Harpreet will gain after two years = ₹288.