A man borrows Rs 40000 for 2 years at 10% annum compounded annually. he paid only half of the principal at the end of 2 years. he paid remaining principal and interest at the same rate at the end of next 2 years. how much amount did he pay at last to clear the dept
Sort of useless to just state the answer, students would learn nothing
from that. Even worse, the answer from the robot tutor is wrong again.
amount owing after 2 years = 40000(1.1)^2 = 48,400
amount paid back = 20,000
(it said 1/2 of the principal, did not say 1/2 of the amount owed)
amount owing after 2 years = 48,400 - 20,000 = 28,400
amount owing at the end of the 4 years = 28,400(1.1)^2 = $34,364.00
The answer by the robot is totally illogical
28970.84
To find out how much amount the man paid at last to clear the debt, we need to calculate the interest for the first 2 years and then add it to the remaining principal and calculate the interest for the next 2 years.
First, let's calculate the interest for the initial 2 years.
Principal (P) = Rs 40000
Rate of interest (R) = 10% per annum
Time (T) = 2 years
Using the formula for compound interest:
Amount = P(1 + R/100)^T
Amount after 2 years = 40000(1 + 10/100)^2
= 40000(1.1)^2
= 48400
Now, the man paid only half of the principal, which is Rs 20000, at the end of 2 years.
So, the remaining principal after the initial 2 years is Rs 40000 - Rs 20000 = Rs 20000.
Next, we need to calculate the interest for the remaining principal for the next 2 years.
Principal (P) = Rs 20000
Rate of interest (R) = 10% per annum
Time (T) = 2 years
Amount after 2 years = 20000(1 + 10/100)^2
= 20000(1.1)^2
= 24200
Finally, the man needs to pay the remaining principal and the interest for the next 2 years, which is Rs 20000 + Rs 24200 = Rs 44200.
Therefore, the man would have to pay Rs 44200 at last to clear the debt.