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Simple/Compound Interest

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by Joy Shaha » Fri May 06, 2016 5:58 am
Q. Mr X,a very industrious person ,wants to establish his own unit.For this he needs an instant loan of Rs 5,00,000 and,every five years he requires an additional loan of Rs. 100,000.If he had to clear all his outstandings in 20 yrs,and he repays the principal of the first loan equally over the 20 yrs,find what amount he would have to pay as interest on his initial borrowing if the rate of interest is 10% p.a. simple interest ??
A)5,60,000
B) 5,40,000
C) 5,50,000
D) 5,00,000
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Source: — Problem Solving |

by [email protected] » Fri May 06, 2016 9:46 am
Hi Joy Shaha,

What is the source of this question? I ask because it's poorly-written and not in the proper 'style' that GMAT writers use. If you're studying for the GMAT, then you would likely find it useful to switch to more reputable practice resources.

GMAT assassins aren't born, they're made,
Rich
Contact Rich at [email protected]
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by varun rawal » Tue Oct 18, 2016 5:56 am
1st method-
The simple interest would be defined on the basis of the sum of the A.P.
50000 + 47500 + 45000 + .... + 2500 = 525000
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