Question

Mrs. Bhandari lends a sum of money to Mr. Magar on the condition that he should pay Rs 18 as the interest of Rs 100 every year. a) What is the rate of interest in percent? b) How much interest should Mr. Magar pay her in 2 years if the loan is Rs 25,000? c) Find the amount paid by Mr. Magar to clear the loan at the end of 2 years. 6.​

Answer 1

Explanation:

a) To calculate the rate of interest, we need to determine the percentage of interest paid on Rs 100.

In this case, Mr. Magar pays Rs 18 as interest on Rs 100.

The rate of interest can be found using the formula:

⇒ Rate of Interest = (Interest / Principal) * 100.

Plugging in the values, we get:

⇒ Rate of Interest = (18 / 100) * 100 = 18%.

Therefore, the rate of interest is 18%.

b) To calculate the interest Mr. Magar should pay in 2 years on a loan of Rs 25,000, we need to use the rate of interest we calculated in part (a).

The formula to calculate interest is:

⇒ Interest = (Principal * Rate of Interest * Time) / 100.

Plugging in the values, we get:

⇒ Interest = (25,000 * 18 * 2) / 100 = Rs 9,000.

Therefore, Mr. Magar should pay Rs 9,000 as interest in 2 years.

c) To find the total amount paid by Mr. Magar to clear the loan at the end of 2 years, we need to add the principal amount to the interest paid.

Total Amount Paid = Principal + Interest.

Plugging in the values, we get:

⇒ Total Amount Paid = 25,000 + 9,000 = Rs 34,000.

Therefore, Mr. Magar needs to pay Rs 34,000 to clear the loan at the end of 2 years.