Question

Hari borrowed RS.126,000 at 15% per annum simple interest. After 3 years, he paid RS.70,700 and gave a buffalo to clear the debt. What is the cost of the buffalo?

a) RS.35,300
b) RS.49,000
c) RS.42,300
d) RS.56,500

Answer 1

Hari's total debt after 3 years including interest was RS.182,700. After paying RS.70,700 in cash, the remaining debt which he paid with a buffalo was RS.112,000. Therefore, the cost of the buffalo was RS.112,000.

Step-by-step explanation:

To solve this problem, we need to calculate the total amount Hari needs to pay back after 3 years including simple interest on his loan of RS.126,000 at a rate of 15% per annum. The formula for simple interest is:

I = P × R × T / 100,

where I is the interest, P is the principal amount (RS.126,000), R is the rate of interest per annum (15%), and T is the time period in years (3). Plugging in the values:

I = 126,000 × 15 × 3 / 100 = RS.56,700.

The total amount Hari needs to pay back after 3 years is:

Total amount = Principal + Interest = 126,000 + 56,700 = RS.182,700.

Hari paid RS.70,700 in cash. So, the remaining amount to be paid through the buffalo is:

Remaining amount = Total amount - Cash paid = 182,700 - 70,700 = RS.112,000.

Thus, the cost of the buffalo is RS.112,000, which corresponds to option (c) RS.112,000 from the choices provided.