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in Compound Interest by (44.3k points)

Anand obtained a loan of ₹ 125000 from the Allahabad bank for buying computers. The bank charges compound interest at 8% per annum, compounded annually. What amount will have to pay after 3 years to clear the debt?

1 Answer

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Best answer

Given:

Present value= ₹ 125000

Interest rate= 8 % per annum

Time= 3 years

To find the amount we have the formula,

Amount (A) = P (1+(R/100))n

Where P is present value, r is rate of interest, n is time in years.

Now substituting the values in above formula we get,

∴ A = 125000 (1 + 8/100)3

⇒ A = 125000 (1+108/100)3

⇒ A = 125000 (108/100) (108/100) (108/100)

⇒ A = 125000 × 1259712/1000 = 1259712/8

⇒ A = ₹ 157464

Anand has to pay ₹ 157464

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