Arif repaid a loan by paying ₹15,625 after 3 years at a rate of 25% p.a. compounded annually. What was the amount of the loan?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. ₹8,000.
A = P(1 + R/100)n
⇒ 15625 = P(1 + 25/100)3
⇒ 15625 = P(5/4)3
⇒ P = 15625 × (64/125) = 8000