Mohan borrowed Rs. 16,000 for 3 years at 5% per annum compound interest. Calculate the amount that Mohan will pay at the end of 3 years. - Mathematics

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Sum

Mohan borrowed Rs. 16,000 for 3 years at 5% per annum compound interest. Calculate the amount that Mohan will pay at the end of 3 years.

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Solution

For 1st year

Principal (P) = Rs.16,000, Rate (R) = 5%, Time (T) = 1 year

∴ Interest =`(16000xx5xx1)/100`= 160 × 5 = Rs.800

∴ Amount at the end of 1st year = Rs. (16,000 + 800) = Rs.16,800

For 2nd year

P = Rs.16,800, R = 5%, T = 1 year

∴ Interest =`(16,800xx5xx1)/100` = 168 × 5 = Rs.840

∴ Amount at the end of 2nd year = Rs. (16,800 + 840) = Rs.17640

For 3rd year

P = 17640, R = 5%, T = 1 year

∴ Interest =`(17640xx5xx1)/100=1764/2` = Rs.882

∴ Amount at the end of 3rd year = Rs. (17640 + 882) = Rs.18522

Hence reqd. amount = Rs.18522

Concept: Concept of Compound Interest
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APPEARS IN

Selina Concise Mathematics Class 8 ICSE
Chapter 9 Interest
Exercise 9 (C) | Q 7 | Page 114
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