1.

Ram borrow Rs.50,000 at 5% annually compound interest, At the end of each year he pay back Rs.2100, How much amount should he pay at the end of the third year to clear his debit?1. Rs.54,4612. Rs.53,4813. Rs.53,3614. Rs.53,4615. None of these

Answer» Correct Answer - Option 3 : Rs.53,361

Given:

Ram borrow Rs.50,000 at 5% annually compound interest

At the end of each year he pay back Rs.2100

Clear debit in 3 years

Concept:

Compound interest is interest on interest.

A = P × (1 + R/100)T

A = Final amount

P = Initial amount

R = Rate of interest

T = Time

Calculation:

At end of 1 year amount = 50000 × (1 + 5/100)

⇒ 50000 × (105/100)

⇒ Rs.52,500

After payback Rs.2,100 remaining amount for pay at the end of 1 year = 52500 – 2100

⇒ Rs.50,400

At end of 2 year amount = 50400 × (1 + 5/100)

⇒ 50400 × (105/100)

⇒ Rs.52,920

After payback Rs.2,100 remaining amount for pay at the end of 2 year = 52920 – 2100

⇒ Rs.50,820

At end of 3 year amount = 50820 × (1 + 5/100)

⇒ 50820 × (105/100)

⇒ Rs.53,361

Rs.53,361 should he pay at the end of the third year to clear his debit.



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