Q2 of 14 Page 93

A person took out a loan of 16,000 rupees from a bank which charges interest compounded quarterly. The annual rate of interest is 10%. How much should he pay back after 9 months to settle the loan?

Investment = 16000 Rs

Annual rate = 10%


Since Interest is compounded quarterly yearly, Interest has to be calculated four times a year.


Quarterly rate = 10/4=2.5%


Amount after 9 months = 16000(1+2.5/100)3


= 17230.25 Rs


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