Question

If Pratap borrows ₹ 6000 for 2 years at 5% p.a. compound interest, then the amount to be repaid to clear the loan is ______.

Options

• ₹ 6600

• ₹ 600

• ₹ 6615

• ₹ 615

Answer 1

If Pratap borrows ₹ 6000 for 2 years at 5% p.a. compound interest, then the amount to be repaid to clear the loan is ₹ 6615.

Explanation:

Step 1: Compound interest formula for amount

`A = P(1 + r/100)^n`

Where:

• A = Amount to be repaid
• P = 6000
• r = 5%
• n = 2 years

Step 2: Substitute values

`A = 6000(1 + 5/100)^2`

`A = 6000 xx (1.05)^2`

Step 3: Calculate (1.05)²

`1.05 xx 1.05 = 1.1025`

`A = 6000 xx 1.1025`

`A = 6615`