Question

Ramu borrowed Rs 50,000 from a bank at the interest rate of 10% for agricultural purpose. The interest rate will be reduced by 5% if he repays the amount properly within 2 years. If he fails to repay in time there will be fine as 1%. Ramu could not repay the amount in time. How much amount Ramu repair?

Answer 1

Amount borrowed = Rs 50,000

Rate of interest = 10%

Interest rate including fine = 10 + 1 = 11%

Amount to be repaid

= 50000 + [50000 × \(\frac{11}{100}\) × 2]

= 50000 + 11000 = 61000

= Rs 61000