Discussion

Question:

A woman borrows Rs.4000 from a bank at 7.50% CI. At the end of every year, she pays Rs.1500 as a part repayment of loan and interest. How much does she still owe to the bank after three such installments?

Explanation:

Amount remaining after:

1 yr = 4000 $(1 + \frac{7.5}{100})$ - 1500 = 2800

2 yr = 2800 $(1 + \frac{7.5}{100})$ - 1500 = 1510

3 yr = 1510 $(1 + \frac{7.5}{100})$ - 1500 = 123.25

Hence, option (a).

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