Q3 of 14 Page 92

Varun took out a loan of 25000 rupees from a bank, which charges 11% interest compounded annually. He paid back 10000 rupees after 2 years. How much should be pay after one more year to settle the loan?

Investment = 25000 Rs, rate=11%

Varun Paid Back 10000 Rs after 2 years.


So we need to calculate Amount after 2 years.


Amount after 2 years = 25000(1+11/100)2


= 30802.5 Rs


Varun paid back 10000 Rs


The principal balance will change.


Remaining balance = 30802.5-10000


= 20802.5 Rs


The Amount is 20802.5 Rs.


This amount will change because bank charges 11% interest compounded annually.


After a year amount paid by varun = 20802.5(1+11/100)1


= 23090.775


.775paisa is rounded to 1 Rupee. Less than .5 are ignored.


=23091 Rs


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