<P>Step-by-step explanation:

The amount that AMIT has to pay at the end of 18 months to clear the entire loan is Rs. 11720.625

Step-by-step explanation:

Prncipal Amount P = 25000 Rs.

Rate of Interest = 10% per annum

Since interest is compounded half yearly

Therefore, rate of interest for half year r = 10/2 = 5%

18 months = 3 half year

Therefore, period n = 3

Now, using the compound interest formula

A=P(1+\frac{r}{100})^nA=P(1+

100

r

)

n

For the FIRST 6 months (1 period), Amit needs to pay

=25000(1+\frac{5}{100})^1=25000(1+

100

5

)

1

=25000\times (1.05)=25000×(1.05)

=26250=26250 Rs.

He paid = 8000 Rs.

Now Principal amount = 26250 - 8000 = 18250

Now in the next 6 months Amit has to pay

=18250(1+\frac{5}{100})^1=18250(1+

100

5

)

1

=18250\times 1.05=18250×1.05

=19162.5=19162.5 Rs.

Amit again paid Rs. = 8000

Thus, the NEW principal amount = 19162.5 - 8000 = 11162.5 Rs.

In the next 6 months Amit has to pay

=11162.5(1+\frac{5}{100})^1=11162.5(1+ 1005 ) 1

=11162.5\times 1.05=11162.5×1.05

=11720.625=11720.625 Rs.

Therefore, at the end of 18 months, Amit has to pay Rs. = 11720.625

Hope this answer is helpful.

Know More:

Q: A man borrows rs 5000 at 12 percent compound interest payable every six months. he repays rs 1800 at the end of every six months . calculate the third payment he has to make at the end of 18 months in order to clear the entire loan.

Q: A farmer borrowed Rs.2400 @12% interest per annum. At the end of 2and1/2 years, he cleared his account by paying Rs.1200 and a COW. What is the cost of the cow?

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