Find interest and total amount paid,if a person take a loan of Rs.6500 for 4 years at 9% rate of interest per annum
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Assuming simple interest:
P = Po + I = Po + Po*r*t.
P = 6500 + 6500*0.09*4 = 6500 + 2340 = $8840 = Total amt. paid.
I = P=Po =
To find the interest and total amount paid on a loan, we can use the formula for calculating compound interest.
The formula for calculating compound interest is:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment/loan, including interest
P = the principal investment/loan amount
r = annual interest rate (as a decimal)
n = number of times that interest is compounded per year
t = number of years
In this case:
Principal amount (P) = Rs.6500
Annual interest rate (r) = 9% or 0.09 (as a decimal)
Number of years (t) = 4
To calculate the interest and total amount paid, we need to determine the value of A using the formula mentioned above.
Let's plug in the values into the formula:
A = 6500(1 + 0.09/1)^(1*4)
Now, we simplify the equation:
A = 6500(1 + 0.09)^4
A = 6500(1.09)^4
A = 6500 * 1.418519
The future value (A) = Rs.9219.8
To find the interest, we subtract the principal amount (P) from the future value (A):
Interest = A - P
Interest = 9219.8 - 6500
Interest = 2719.8
Therefore, the interest on the loan is Rs.2719.8.
To calculate the total amount paid, we add the interest to the principal amount:
Total Amount Paid = P + Interest
Total Amount Paid = 6500 + 2719.8
Total Amount Paid = 9219.8
Therefore, the total amount paid on the loan is Rs.9219.8.