If tanu paid back entire loan on completion of course, then find
Direction: Study the given information carefully and answer the following questions accordingly.
Tanu took a loan from a bank to pursue her M.Arch degree from a reputed college in New Delhi. The bank agreed to pay 80% of all her expenses. M.Arch course was a two year course, having four semesters each of 6 months. Tuition fee for each semester was Rs. 2,50,000. She took hostel to stay, her hostel charges were Rs. 5500/per month and extra expenses per month were Rs. 3400.
Based on the given information, answer the following questions.Question 1: If tanu paid back entire loan on completion of course, then find the amount of interest paid by Tanu. Given that bank charges simple interest at the rate of 9% per annum.
A. Rs. 170758.4
B. Rs. 170054.8
C. Rs. 179758.4
D. Rs. 168454.8
E. Rs. 174758.4
Right Answer is: E
SOLUTION
Total expenditure on rent = 24 months × Rs. 5500 = Rs. 132000
Total expenditure on other expenses = 24 months × Rs. 3400 = Rs. 81600
Total expenditure on tuition fees = 4 semesters × Rs. 25000 = Rs. 1000000
Thus total expenditure = 132000 + 81600 + 1000000 = Rs. 1213600
The bank paid 80% of this amount.
Amount paid by the bank = 80/100 × 1213600 = Rs. 970880
∴ Simple Interest = (970880 × 2 × 9)/100 = Rs. 174758.4