Multiple choice

Sameer borrowed 17500 Rs. from Divyaraj on compound interest annually at the rate of 20% per annum, if he paid 5000 Rs. at the end of every year to Divyaraj then find how much amount Sameer have to pay at the end of fourth year for complete his debt?

  1. (a) 14168

  2. (b) 14648

  3. (c) 14848

  4. (d) 14448

  5. (e) 14248
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Year 1: 17500 * 1.2 - 5000 = 16000. Year 2: 16000 * 1.2 - 5000 = 14200. Year 3: 14200 * 1.2 - 5000 = 12040. Year 4: 12040 * 1.2 = 14448.

AI explanation

Starting with a principal of Rs. 17500, adding 20% annual compound interest and subtracting Rs. 5000 leaves a balance of Rs. 16000 at the end of year one. Repeating this for the second year gives (16000 * 1.20) - 5000 = Rs. 14200, and for the third year gives (14200 * 1.20) - 5000 = Rs. 12040. Applying the interest for the fourth year without subtracting the payment gives 12040 * 1.20 = Rs. 14448, making the result 14448.

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