Question

An amount of 19,000 is borrowed for 7 years at 7.75% interest, compounded annually. If the loan is paid in full at the end of that period, how much be paid back?

Answer 1

The Amount paid back after 7 years is Rs 32,038.674 .

Explanation:

Given as :

The loan amount borrowed = p = Rs 19,000

The rate of interest applied = r = 7.75% compounded annually

The time period of loan = t = 7 years

Let The Amount paid back after 7 years = Rs A

Now,From Compound Interest method

Amount = Principal ×
`(1+(\texrm rate)/(100))^(\textrm time)`

Or, A = p ×
`(1+(\texrm r)/(100))^(\textrm t)`

Or, A = Rs 19,000 ×
`(1+(\texrm 7.75)/(100))^(\textrm 7)`

Or, A = Rs 19,000 ×
`(1.0775)^(7)`

Or, A = Rs 19,000 × 1.686246

∴ A = Rs 32,038.674

So, The Amount paid back after 7 years = A = Rs 32,038.674

Hence, The Amount paid back after 7 years is Rs 32,038.674 . Answer