Question

Mike borrowed a sum of rs 9450 for 5 years at a rate of 6% per year. calculate the total amount that he had to pay.

Answer 1

First year :

9450 + 9450 × ( 6 / 100 ) =

9450 + ( 9450 × 6 / 100 ) =

9450 + ( 56700 / 100 ) =

9450 + 567 =

Rs 10,017

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Second year :

10,017 + 10,017 × ( 6 / 100 ) =

10,017 + ( 10,017 × 6 / 100 ) =

10,017 + ( 60,102 / 100 ) =

10,017 + 601.02 =

Rs 10,618.02

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Third year :

10,618.02 + 10,618.02 × ( 6 / 100 ) =

10,618.02 + ( 10,618.02 × 6 / 100 ) =

10,618.02 + ( 63,708.12 / 100 ) =

10,618.02 + 637.0812 =

Rs 11,255.1012

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4th year :

11,255.1012 + 11,255.1012 × ( 6 / 100 ) =

11,255.1012 + ( 11,255.1012 × 6 / 100 ) =

11,255.1012 + ( 67,530.6072 / 100 ) =

11,255.1012 + 675.306072 =

Rs 11,930.407272

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5th year :

11,930.407272 + 11,930.407272 × ( 6 / 100 )

=11,930.407272 +( 11,930.407272 × 6 / 100)

= 11,930.407272 + ( 71,582.443632 / 100 )

= 11,930.407272 + 715.82443632

= Rs 12,646.23170832

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Thus Mike have to pay approximately Rs 12,646 after 5 years.

Answer 2

A =?

P= 9456

r = 6% = 0.06

t = 5 yrs

Formula

A= P(1+r)^t

A= 9456×1.06⁵

A = 12646.23

the total amount that he had to pay was 12646 rs