Question

Balu and Ramu decided to borrow Rs 15000 each for a joint business. Balu borrowed Rs 15000 from a financier Who imputes Rs 5 per month for Rs 100 as interest. Ramu borrowed Rs 15000 from a bank where compound interest of 12 % is computed. How much money both of them have to repay after 2 years?

Answer 1

Interest Balu has to pay after 2 years

= 15000 × \(\frac{60}{100}\) × 2 = Rs. 18000

(Interest for Rs 100 per month in Rs 5.

Interest for Rs 100 in an year = 5 × 12

= Rs. 60.

The rate of interest = 60%)

Amount Balu has to repay after 2 years

= 15000 + 18000

= Rs 33000

In the case of Ramu interest is computed as compound interest.

Principal for first year = Rs 15000

Interest for 1^st year

= 15000 × \(\frac{12}{100}\) × 1 = Rs 1800

Principal for 2^nd year

= 15000 + 1800

= Rs 16800

Interest for the second year = 16800 × \(\frac{12}{100}\) × 1 = Rs. 2018

Amount Ramu has to repay

= 16800 + 2018

= Rs 18816