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A man borrowed ₹ 20000 from a money lender but he coudt not repay the amount for a period of a 4 years .According the money lenders demand showed ₹26500 due from him ,At what rate percent annum compound interest did the money lender lend his money ?
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A man borrowed ₹ 20000 from a money lender but he coudt not repay the...
Solution:
Given,
Principal amount (P) = ₹ 20000
Time period (n) = 4 years
Amount due (A) = ₹ 26500
Formula:
The formula to calculate compound interest is given by:
A = P (1 + R/100)ⁿ
Where,
A = Amount due
P = Principal amount
R = Rate of interest per annum
n = Time period in years
Calculation:
Substituting the values in the above formula, we get:
₹ 26500 = ₹ 20000 (1 + R/100)⁴
(1 + R/100)⁴ = 26500/20000
(1 + R/100)⁴ = 1.325
Taking the fourth root on both sides, we get:
1 + R/100 = 1.092
R/100 = 0.092
R = 9.2%
Therefore, the money lender lent his money at a compound interest rate of 9.2% per annum.
Explanation:
Compound interest is the interest earned on the principal amount as well as the interest earned on it over a period of time. In this question, the man borrowed ₹ 20000 from a money lender and did not repay the amount for 4 years. The money lender demanded ₹ 26500 from him, which includes the principal amount and the interest earned on it over the 4-year period.
Using the formula for compound interest, we can calculate the rate at which the money lender lent his money to the man. Substituting the given values in the formula, we get the value of R as 9.2%. This means that the money lender charged an interest of 9.2% per annum on the principal amount for the 4-year period.
Given,
Principal amount (P) = ₹ 20000
Time period (n) = 4 years
Amount due (A) = ₹ 26500
Formula:
The formula to calculate compound interest is given by:
A = P (1 + R/100)ⁿ
Where,
A = Amount due
P = Principal amount
R = Rate of interest per annum
n = Time period in years
Calculation:
Substituting the values in the above formula, we get:
₹ 26500 = ₹ 20000 (1 + R/100)⁴
(1 + R/100)⁴ = 26500/20000
(1 + R/100)⁴ = 1.325
Taking the fourth root on both sides, we get:
1 + R/100 = 1.092
R/100 = 0.092
R = 9.2%
Therefore, the money lender lent his money at a compound interest rate of 9.2% per annum.
Explanation:
Compound interest is the interest earned on the principal amount as well as the interest earned on it over a period of time. In this question, the man borrowed ₹ 20000 from a money lender and did not repay the amount for 4 years. The money lender demanded ₹ 26500 from him, which includes the principal amount and the interest earned on it over the 4-year period.
Using the formula for compound interest, we can calculate the rate at which the money lender lent his money to the man. Substituting the given values in the formula, we get the value of R as 9.2%. This means that the money lender charged an interest of 9.2% per annum on the principal amount for the 4-year period.
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A man borrowed ₹ 20000 from a money lender but he coudt not repay the amount for a period of a 4 years .According the money lenders demand showed ₹26500 due from him ,At what rate percent annum compound interest did the money lender lend his money ??
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A man borrowed ₹ 20000 from a money lender but he coudt not repay the amount for a period of a 4 years .According the money lenders demand showed ₹26500 due from him ,At what rate percent annum compound interest did the money lender lend his money ?? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A man borrowed ₹ 20000 from a money lender but he coudt not repay the amount for a period of a 4 years .According the money lenders demand showed ₹26500 due from him ,At what rate percent annum compound interest did the money lender lend his money ?? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A man borrowed ₹ 20000 from a money lender but he coudt not repay the amount for a period of a 4 years .According the money lenders demand showed ₹26500 due from him ,At what rate percent annum compound interest did the money lender lend his money ??.
A man borrowed ₹ 20000 from a money lender but he coudt not repay the amount for a period of a 4 years .According the money lenders demand showed ₹26500 due from him ,At what rate percent annum compound interest did the money lender lend his money ?? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A man borrowed ₹ 20000 from a money lender but he coudt not repay the amount for a period of a 4 years .According the money lenders demand showed ₹26500 due from him ,At what rate percent annum compound interest did the money lender lend his money ?? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A man borrowed ₹ 20000 from a money lender but he coudt not repay the amount for a period of a 4 years .According the money lenders demand showed ₹26500 due from him ,At what rate percent annum compound interest did the money lender lend his money ??.
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