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Question
Kamala borrowed Rs 26400 from a Bank to buy a scooter at a rate of 15% p.a. compounded yearly. What amount will she pay at the end of 2 years and 4 months to clear the loan?
(Hint: Find A for 2 years with interest is compounded yearly and then find SI on the 2nd year amount for `4/12` years.)
Solution
Principal (P) = Rs 26,400
Rate (R) = 15% per annum
Number of years (n) = `2 4/12` year
The amount for 2 years and 4 months can be calculated by first calculating the amount for 2 years using the compound interest formula, and then calculating the simple interest for 4 months on the amount obtained at the end of 2 years.
Firstly, the amount for 2 years has to be calculated.
`A = Rs [26400(1 + 15/100)^2] = Rs [26400 (1 + 3/20)^2]`
= `Rs (26400 xx23/20 xx23/20)` = Rs 34914
By taking Rs 34,914 as principal, the S.I. for the next `1/3` years will be calulated
S.I. Rs `((34914 xx 1/3 xx 15)/100)` = Rs . 1745.70
Interest for the first two years = Rs (34914 − 26400) = Rs 8,514
And interest for the next `1/3` year = Rs 1,745.70
Total C.I. = Rs (8514 + Rs 1745.70) = Rs 10,259.70
Amount = P + C.I. = Rs 26400 + Rs 10259.70 = Rs 36,659.70
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