Anand obtained a loan of Rs. 125000 from the Allahabad Bank for buying

1.	Anand obtained a loan of Rs. 125000 from the Allahabad Bank for buying computers. The bank charges compound interest at 8% per annum, compounded annually. What amount pwill he have to pay after 3 years to clear the debt?
Answer» Present value = Rs.125000 Interest rate = 8% per annum Time = 3 years Amount (A) = P (1 + R/100)ⁿ [Where, P = Present value R = Annual interest rate n = Time in years] ∴ A = 125000 (1 + 8/100)³ ⇒ A = 125000 (108/100)³ ⇒ A = 125000 × 108/100 × 108/100 × 108/100 ⇒ A = 125000 × 1259712/1000000 ⇒ A = 125 × 1259712/1000 ⇒ A = 1259712/8 ⇒ A = 157464 ∴ Amount = Rs.157464 ∴ Anand has to pay Rs.157464 after 3 years to clear the debt.

Anand obtained a loan of Rs. 125000 from the Allahabad Bank for buying computers. The bank charges compound interest at 8% per annum, compounded annually. What amount pwill he have to pay after 3 years to clear the debt?

Answer»

Present value = Rs.125000

Interest rate = 8% per annum

Time = 3 years

Amount (A) = P (1 + R/100)ⁿ [Where, P = Present value

R = Annual interest rate

n = Time in years]

∴ A = 125000 (1 + 8/100)³

⇒ A = 125000 (108/100)³

⇒ A = 125000 × 108/100 × 108/100 × 108/100

⇒ A = 125000 × 1259712/1000000

⇒ A = 125 × 1259712/1000

⇒ A = 1259712/8

⇒ A = 157464

∴ Amount = Rs.157464

∴ Anand has to pay Rs.157464 after 3 years to clear the debt.