Kamala borrowed Rs 26,400 from a Bank to buy a scooter at a rate of 15% p.a. compounded yearly. What amount will she pay at the end of 2 years and 4 months to clear the loan?

Given: Principal (P) = Rs. 26,400

Time (n) = 2 years 4 months = 7/3

Rate of interest (R) = 15% p.a.

***Concept: The amount for 2 years and 4 months can be calculated as finding the compound interest for 2 years and then calculating simple interest for 4 months on the amount obtained after 2 years. *

Thus, the interest for 2 years (A), will be given as:

On putting the values in the formula, we get,

Therefore, the total amount = Rs. 36,659.70

Thus, Kamala will pay Rs. 36,659.70 at the end of 2 years and 4 months to clear the loan.

2