Question

Sameerrao has taken a loan of ₹ 12500 at a rate of 12 p.c.p.a. for 3 years. If the interest is compounded annually, then how many rupees should he pay to clear his loan?

Answer 1

Here, P = ₹ 12500; R = 12% ; N = 3 years

A = P ${\displaystyle {(1+\frac{R}{100})}^N}$

   = ${\displaystyle 12500{(1+\frac{12}{100})}^3}$

   = ${\displaystyle 12500{\left(\frac{100+12}{100}\right)}^3}$

    = ${\displaystyle 12500{\left(\frac{112}{100}\right)}^3}$

    = ${\displaystyle 12500{\left(\frac{28\times 4}{25\times 4}\right)}^3}$

    = ${\displaystyle 12500{\left(\frac{28}{25}\right)}^3}$

    = ${\displaystyle 12500\times \frac{28}{25}\times \frac{28}{25}\times \frac{28}{25}}$

     = ${\displaystyle \frac{20}{25}\times 28\times 28\times 28}$

     = ${\displaystyle 0.8\times 28\times 28\times 28}$

    = ₹ ${\displaystyle 17561.60}$

Hence, he should pay an amount of  ₹ 17561.60 to clear his loan.