InterviewSolution
Saved Bookmarks
InterviewSolution
| 1. |
Ishwar lends an amount of Rs.2400 from Abdul. They agree that Ishwar will repay Abdul in the form of three annual instalments, over the period of three years, with the rates of interest being 2% for the first year, 4% for the second year, and 6% for the third year. It is known that the principal for the next year will be calculated based on the amount received at the end of the previous year. How much additional money does Ishwar need to pay at the end of three years, in the form of compound interest?1. 198.682. 298.683. 348.684. 358.285. 248.48 |
|
Answer» Correct Answer - Option 2 : 298.68 Given: Amount lent by Ishwar from Abdul (Principal) = Rs.2400 Number of years = 3 Rate of Interest for the first year = 2% Rate of Interest for the second year = 4% Rate of Interest for the third year = 6% Formula Used: When the rates of Interest are R1%, R2%, and R3% for the first, the second and the third year, respectively; then the amount at the end of three years is given as: Amount = P × [1 + (R1/100)] × [1 + (R2/100)] × [1 + (R3/100)] Interest = Amount - Principal Calculation: The amount will be calculated according to the above-mentioned formula, as: Amount = 2400 × [1 + (2/100)] × [1 + (4/100)] × [1 + (6/100)] ⇒ Amount = 2400 × 1.02 × 1.04 × 1.06 ⇒ Amount = Rs.2698.68 ∵ Compound Interest = Amount - Principal ∴ The compound Interest is calculated as: 2698.68 - 2400 = Rs.298.68 ∴ The additional money that Ishwar needs to pay at the end of three years, in the form of compound interest, is Rs.298.68 |
|