Question

A loan of 10,000 was given to Aman for 3 years at 10% for the 1^st year, 15% for the rest of 2 years. Find the amount Aman will have to pay. (Interest is compounded annually)
1. 14357.5
2. 13456.6
3. 14557.5
4. 14547.5

Answer 1

Correct Answer - Option 4 : 14547.5

Given:

Loan Amount(P) = Rs. 10,000

Time = 3 years

Rate for 1^st year(x) = 10%

Rate for 2^nd and 3^rd year(y) = 15%

Formula used:

Net effect formula for CI = x + y + (x × y) / 100

Calculations:

Rate for 1^st, 2^nd and 3^rd year is 10%,15% and 15%

P = 10,000 and T = 3 years

Net effect for 1^st 2 years

⇒ x + y + (x × y) / 100

⇒ 10 + 15 + (10 × 15) / 100

⇒ 26.5%

Now for 3^rd year

⇒ 26.6 + 15 + (26.5 × 15) /100

⇒ 41.5 + 3.975

⇒ 45.475%

Let, Principal be 100x

Amount = (P + CI)

= 100x + 45.475x

⇒ 145.475x

⇒ 100x = 10000

⇒ 145.475x = 14547.5

∴The amount Aman will have to pay is Rs. 14547.5.