Question

raghav takes a personal loan of rupees 25000 from a finance company.the company charges an interest of 16% per annum compounded half-yearly.what is the total amount paid by him at the end of 2 years?

Answer 1

Solution!!

The concept of compound interest has to be used here.

Principal (P) = Rs 25000

Rate of interest (R) = 16%

Time (n) = 2 years

Interest is being compounded half yearly. So,

Rate of interest (R) = 16 ÷ 2 = 8%

Time (n) = 2 × 2 = 4

Amount = P(1 + (R/100))ⁿ

Amount = 25000(1 + (8/100))⁴

Amount = 25000(108/100)⁴

Amount = 25000(27/25)⁴

Amount = 25000 × (27/25) × (27/25) × (27/25) × (27/25)

Amount = Rs 34012.22

The total amount paid by him at the end of 2 years is Rs 34012.22

The questioner may ask you to find the compound interest also. So,

Compound interest = Amount - Principal

Answer 2

Question :-

1. Raghav takes a personal loan of rupees 25000 from a finance company. The company charges an interest of 16% per annum compounded half-yearly. What is the total amount paid by him at the end of 2 years?

To find :-

• The simple interest

Let,

• Simple interest be S.I

Formula to be used :-

$\sf{S.I=\dfrac{P \times T \times R }{100}$

Solution :-

Principal (P) = 25,000

Rate of Interest (R) = 16%

Time (T) = 2 years

Solve the sum by using the formula :-

$\sf{S.I= \dfrac{P \times T \times R}{100}$

$\sf{S.I=\dfrac{25,000 \times 16 \times 2}{100}$

  So, here 100 gets cancelled and two zeroes from 25,000 also gets cancelled

$\sf{S.I=250 \times 16 \times 2}$

S.I = ₹8000

⁂  So, therefore ₹8000 is the Simple Interest

To find the amount,

 To find the total amount paid by him use this formula

A = P + I

Solve it by using the formula

A = 25,000 + 8000

Compound interest = 33,000 + 1,012.22

                                 = 34,012.22

⁂ So the total amount paid by him at the end is ₹34,012.22