Question

Value based question: Raju belonged to a poor family. Once his father decided to borrow Rs. 12,000 from a landlord at 6% for 2 years compounded annually. Raju
friend Aditya heard about this and he forbade Raju's father to borrow the money from the landlord. He told his father about a bank which used to give money at
simple interest. Knowing the difference between the interests paid, Raju's father became very happy. Now answer the following questions: What excess amount
would Raju's father have to paid the landlord?​

Answer 1

Given :-

• Principal = P = Rs.12000 .
• Time = T = 2 years.
• Rate = R = 6% per annum .

To Find :-

• What excess amount would Raju's father have to paid the landlord ?

Solution :-

we know that, when rate is compounded annually,

• Amount = P[1 + (R/100)]^(T) .

putting values we get,

→ Amount paid to Landlord = 12000[1 + (6/100)]² = 12000 * [1 + (3/50)]² = 12000 * (53/50)² = (12000 * 2809) / 2500 = Rs.13483.2 .

we know that, when rate is at simple interest per annum,

• Interest = (P * R * T)/100
• Amount = P + interest .

so,

→ Interest = (12000 * 2 * 6)/100 = Rs.1440 .

then,

→ Amount paid to Bank = 12000 + 1440 = Rs.13440 .

therefore,

→ Excess amount paid to Landlord = 13483.2 - 13440 = Rs.43.5 (Ans.)

Hence, Rs.43.5 is the excess amount that Raju's father have to paid the landlord .

Learn more :-

CI in 2yr is Rs. 1600 and in 3 yrs it will be Rs. 1700. Find the rate of interest.

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