Multiple choice

Rahul borrows Rs. 3,00,000 at an annual interest rate of 10%, compounded yearly. He repays Rs. 20,000 at the end of the first year and settles the remaining balance at the end of the fourth year. The total interest paid over the four years, in rupees, is approximately:

  1. Rs. 1,02,610

  2. Rs. 1,20,000

  3. Rs. 1,25,410

  4. Rs. 1,32,610

  5. None of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Year 1: 300000 * 1.1 = 330000. Pay 20000, balance = 310000. Year 2: 310000 * 1.1 = 341000. Year 3: 341000 * 1.1 = 375100. Year 4: 375100 * 1.1 = 412610. Total paid = 20000 + 412610 = 432610. Total interest = 432610 - 300000 = 132610.

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