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Mr. X, a very industrious person, wants to establish his own unit. For this he needs an instant loan of Rs. 5,00,000 and, every five years he requires an additional loan of Rs. 100,000. If he had to clear all his outstandings in 20 years, and he repays the principal of the first loan equally over the 20 years, find what amount he would have to pay as interest on his initial borrowing if the rate of interest is 10% p.a. Simple Interest.
- a)Rs. 560,000
- b)Rs. 540,000
- c)Rs. 525,000
- d)Rs. 500,000
Correct answer is option 'C'. Can you explain this answer?
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Mr. X, a very industrious person, wants to establish his own unit. For...
The simple interest would be defined on the basis of the sum of the AR
50000 + 47500 + 45000 + ... + 2500 = 525000.
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Mr. X, a very industrious person, wants to establish his own unit. For...
Given:
Amount of initial loan = Rs. 5,00,000
Amount of additional loan required every 5 years = Rs. 1,00,000
Total time period to clear all outstandings = 20 years
Rate of interest = 10% p.a. Simple Interest
To find:
Amount of interest Mr. X would have to pay on his initial borrowing
Solution:
Let us first calculate the total amount of additional loans Mr. X would need over the 20-year period:
Total number of additional loans = 20/5 - 1 = 3
Total amount of additional loans = 3 x Rs. 1,00,000 = Rs. 3,00,000
Now, let us calculate the total amount that Mr. X would have to repay over the 20-year period:
Amount of initial loan = Rs. 5,00,000
Amount of additional loans = Rs. 3,00,000
Total amount to be repaid = Rs. 8,00,000
Since Mr. X is repaying the principal of the first loan equally over the 20 years, the annual repayment amount would be:
Annual repayment amount = Rs. 5,00,000/20 = Rs. 25,000
Now, let us calculate the total amount of interest that Mr. X would have to pay on his borrowing:
Total interest = (Principal x Rate x Time) + (Principal x Rate x Time) + ... (for all loans)
Total interest = (Rs. 5,00,000 x 10% x 20) + (Rs. 1,00,000 x 10% x 15) + (Rs. 1,00,000 x 10% x 10) + (Rs. 1,00,000 x 10% x 5)
Total interest = Rs. 10,00,000 + Rs. 1,50,000 + Rs. 1,00,000 + Rs. 50,000
Total interest = Rs. 12,00,000
Therefore, the amount of interest Mr. X would have to pay on his initial borrowing is Rs. 5,25,000 (option c).
Amount of initial loan = Rs. 5,00,000
Amount of additional loan required every 5 years = Rs. 1,00,000
Total time period to clear all outstandings = 20 years
Rate of interest = 10% p.a. Simple Interest
To find:
Amount of interest Mr. X would have to pay on his initial borrowing
Solution:
Let us first calculate the total amount of additional loans Mr. X would need over the 20-year period:
Total number of additional loans = 20/5 - 1 = 3
Total amount of additional loans = 3 x Rs. 1,00,000 = Rs. 3,00,000
Now, let us calculate the total amount that Mr. X would have to repay over the 20-year period:
Amount of initial loan = Rs. 5,00,000
Amount of additional loans = Rs. 3,00,000
Total amount to be repaid = Rs. 8,00,000
Since Mr. X is repaying the principal of the first loan equally over the 20 years, the annual repayment amount would be:
Annual repayment amount = Rs. 5,00,000/20 = Rs. 25,000
Now, let us calculate the total amount of interest that Mr. X would have to pay on his borrowing:
Total interest = (Principal x Rate x Time) + (Principal x Rate x Time) + ... (for all loans)
Total interest = (Rs. 5,00,000 x 10% x 20) + (Rs. 1,00,000 x 10% x 15) + (Rs. 1,00,000 x 10% x 10) + (Rs. 1,00,000 x 10% x 5)
Total interest = Rs. 10,00,000 + Rs. 1,50,000 + Rs. 1,00,000 + Rs. 50,000
Total interest = Rs. 12,00,000
Therefore, the amount of interest Mr. X would have to pay on his initial borrowing is Rs. 5,25,000 (option c).
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Mr. X, a very industrious person, wants to establish his own unit. For this he needs an instant loan of Rs. 5,00,000 and, every five years he requires an additional loan of Rs. 100,000. If he had to clear all his outstandings in 20 years, and he repays the principal of the first loan equally over the 20 years, find what amount he would have to pay as interest on his initial borrowing if the rate of interest is 10% p.a. Simple Interest.a)Rs. 560,000b)Rs. 540,000c)Rs. 525,000d)Rs. 500,000Correct answer is option 'C'. Can you explain this answer?
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Mr. X, a very industrious person, wants to establish his own unit. For this he needs an instant loan of Rs. 5,00,000 and, every five years he requires an additional loan of Rs. 100,000. If he had to clear all his outstandings in 20 years, and he repays the principal of the first loan equally over the 20 years, find what amount he would have to pay as interest on his initial borrowing if the rate of interest is 10% p.a. Simple Interest.a)Rs. 560,000b)Rs. 540,000c)Rs. 525,000d)Rs. 500,000Correct answer is option 'C'. Can you explain this answer? for Quant 2024 is part of Quant preparation. The Question and answers have been prepared according to the Quant exam syllabus. Information about Mr. X, a very industrious person, wants to establish his own unit. For this he needs an instant loan of Rs. 5,00,000 and, every five years he requires an additional loan of Rs. 100,000. If he had to clear all his outstandings in 20 years, and he repays the principal of the first loan equally over the 20 years, find what amount he would have to pay as interest on his initial borrowing if the rate of interest is 10% p.a. Simple Interest.a)Rs. 560,000b)Rs. 540,000c)Rs. 525,000d)Rs. 500,000Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Quant 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mr. X, a very industrious person, wants to establish his own unit. For this he needs an instant loan of Rs. 5,00,000 and, every five years he requires an additional loan of Rs. 100,000. If he had to clear all his outstandings in 20 years, and he repays the principal of the first loan equally over the 20 years, find what amount he would have to pay as interest on his initial borrowing if the rate of interest is 10% p.a. Simple Interest.a)Rs. 560,000b)Rs. 540,000c)Rs. 525,000d)Rs. 500,000Correct answer is option 'C'. Can you explain this answer?.
Mr. X, a very industrious person, wants to establish his own unit. For this he needs an instant loan of Rs. 5,00,000 and, every five years he requires an additional loan of Rs. 100,000. If he had to clear all his outstandings in 20 years, and he repays the principal of the first loan equally over the 20 years, find what amount he would have to pay as interest on his initial borrowing if the rate of interest is 10% p.a. Simple Interest.a)Rs. 560,000b)Rs. 540,000c)Rs. 525,000d)Rs. 500,000Correct answer is option 'C'. Can you explain this answer? for Quant 2024 is part of Quant preparation. The Question and answers have been prepared according to the Quant exam syllabus. Information about Mr. X, a very industrious person, wants to establish his own unit. For this he needs an instant loan of Rs. 5,00,000 and, every five years he requires an additional loan of Rs. 100,000. If he had to clear all his outstandings in 20 years, and he repays the principal of the first loan equally over the 20 years, find what amount he would have to pay as interest on his initial borrowing if the rate of interest is 10% p.a. Simple Interest.a)Rs. 560,000b)Rs. 540,000c)Rs. 525,000d)Rs. 500,000Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Quant 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mr. X, a very industrious person, wants to establish his own unit. For this he needs an instant loan of Rs. 5,00,000 and, every five years he requires an additional loan of Rs. 100,000. If he had to clear all his outstandings in 20 years, and he repays the principal of the first loan equally over the 20 years, find what amount he would have to pay as interest on his initial borrowing if the rate of interest is 10% p.a. Simple Interest.a)Rs. 560,000b)Rs. 540,000c)Rs. 525,000d)Rs. 500,000Correct answer is option 'C'. Can you explain this answer?.
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