Multiple choice

Raman took a loan of Rs.15000 from Laxman. He was agreed that for the first three years rate of interest charged would be at 8% Simple Interest per annum and at 10% Compound Interest (compounded, annually) from the fourth year onwards. Ram did not pay anything until the end of the fifth year. How much would he repay if he clears the entire amount, only at the end of fifth year? (In Rs.)

  1. Rs.22506

  2. Rs.22105

  3. Rs.22900

  4. Rs.22500

  5. Rs.22450
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

First 3 years: Simple Interest = 15000 × 8% × 3 = Rs. 3600. Amount after 3 years = Rs. 18600. Next 2 years: Compound Interest at 10% annually. After year 4: 18600 × 1.1 = Rs. 20460. After year 5: 20460 × 1.1 = Rs. 22506.

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