Question

Rajan’s annual salary in 2008 is Rs.40,000 and increases each year by Rs.4000.In the beginning of 2008 Rajan took a loan of Rs. 44,000 form the company. Find in how many years Rajan would repay the loan given (a) Interest at the end of 2008 is Rs.3600 and increases every year by Rs.800 thereafter. (b) Rajan pays 20% of his annual income every year towards repayment of loan.

Answer 1

Answer:

Annual salary of Rajan = Rs 40,000

And, Increase in salary every year = Rs 4,000

Amount of loan taken by Rajan in the beginning of year 2008 =Rs 44,000

Formula for Simple Interest

Simple interest

$=\frac{P \times R \times T}{100}$

$40,00=\frac{40,000 *R*1}{100}\\\\R=10$

R=10%

Rajan's Salary increases by 10% every year.

As, it is also given that,Rajan pays 20% of his annual income every year towards repayment of loan.

Amount paid as a Loan at the end of year 2008

$=\frac{40,000 \times 20 \times 1}{100}\\\\=8,000$

Rajan salary after a year=40,000+$40,000\times\frac{10}{100}=44000$

Also, Interest at the end of 2008 is Rs.3600 and increases every year by Rs.800 thereafter.Therefore

Value of Loan after each year that is at the end of 2008 and coming years =[(44,000+3600)→2008]+[800→2009]+[800→2010]+[800→2011]+[800→2012]+[800→2013]+[800→2014]+[800=Rs 52,400

Money paid as loan at the end of each year that is from the end of 2008=[8000→2008]+[8800→2009]+[9600→2010]+[10,400→2011]+[11,200→2012]+[12,000→2013]+[12800→2014]=[48,000→2013] +[12800→→2014]=Rs 60,800

So, Rajan will Repay his Loan completely at the end of year 2014.That is 2014-2008+1= in 7 years total loan will be Repaid.