Question

21.A man borrowed Rs. 50,000 for 3 years at the rate of 12% simple interest but he could pay only Rs. 25,000 at the end of 3 years and

agreed to clear his debt at the end of next two years at the rate of 10 %
annual compound interest. Find how much should he pay to clear his
debt? Also find the amount of interest he paid altogether.

Answer 1

The amount of interest he paid for the first 3 years is 50,000 * 12 * 3 / 100 = Rs. 18,000.
The amount left to pay after the first 3 years is 50,000 - 25,000 = Rs. 25,000.
The amount of compound interest for the next 2 years is 25,000 * (1 + 0.10)^2 = Rs. 28,250.
So, the total amount to be paid is 25,000 + 28,250 = Rs. 53,250.
The total amount of interest he paid is 18,000 + 28,250 - 25,000 = Rs. 21,250