Question
A businessman took a loan at 25% p.a. simple interest.
After 40 months, he repaid Rs. 12,500 to clear the loan. Find the principal amount borrowed.Solution
ATQ,
Let the borrowed amount be Rs ‘x’.
ATQ;
(12500 – x) = (x × 25 × 40) ÷ (100 × 12)
Or, (12500 – x) = (25x/30)
Or, 12500 = {(25x/30) + x}
Or, 12500 = (55x/30)
So, x = 6818
Therefore, the borrowed amount was Rs. 6,818.
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