Question

An amount of 19,000 is borrowed for 7 years at 7.75% interest, compounded annually. If the loan is paid in full at the end of that period, how much be paid back?

Answer 1

Answer:

The Amount paid back after 7 years is Rs 32,038.674  .

Step-by-step explanation:

Given as :

The loan amount borrowed = p = Rs 19,000

The rate of interest applied = r = 7.75% compounded annually

The time period of loan = t = 7 years

Let The Amount paid back after 7 years = Rs A

Now,From Compound Interest method

Amount = Principal × $(1+\dfrac{\texrm rate}{100})^{\textrm time}$

Or, A = p × $(1+\dfrac{\texrm r}{100})^{\textrm t}$

Or, A = Rs 19,000 × $(1+\dfrac{\texrm 7.75}{100})^{\textrm 7}$

Or, A = Rs 19,000 × $(1.0775)^{7}$

Or, A = Rs 19,000 × 1.686246

∴   A = Rs 32,038.674

So, The Amount paid back after 7 years = A = Rs 32,038.674

Hence, The Amount paid back after 7 years is Rs 32,038.674  . Answer