MBApyq

MBA Loan Repayment with Compound Interest

CMAT 2025 · Quantitative Techniques & Data Interpretation · Medium · Quantitative Techniques

All CMAT 2025 questionsMore Quantitative Techniques questionsAll CMAT QTDI

Ravi took a loan from HDFC Bank for his 2-year MBA program at IIM. He took the loan of ₹ 6 lakh such that he would be charged at 8% per annum compound interest during his program and at 10% per annum compound interest after completion of course. He returned half of the amount which he had to pay on the completion of his program and remaining after 2 years. What is the total amount returned by Ravi?

  1. A.

    ₹ 7.73323 lakh

  2. B.

    ₹ 6.83231 lakh

  3. C.

    ₹ 7.58 lakh

  4. D.

    ₹ 7.336 lakh

Answer

A

Explanation

Amount after 2 years at 8% p.a. CI = 6×(1+0.08)2=6×1.1664=6.99846 \times (1 + 0.08)^2 = 6 \times 1.1664 = 6.9984 lakh. He repays half: 3.49923.4992 lakh. Remaining balance = 3.49923.4992 lakh. This remaining balance compounds at 10% p.a. for 2 years: 3.4992×(1+0.10)2=3.4992×1.21=4.2340323.4992 \times (1 + 0.10)^2 = 3.4992 \times 1.21 = 4.234032 lakh. Total amount returned = 3.4992+4.234032=7.7332323.4992 + 4.234032 = 7.733232 lakh.

Related Quantitative Techniques questions

Practise this under exam conditions

Sign in to solve it with a live timer, the on-screen CAT calculator, and streak and accuracy tracking across every question you attempt.

Solve in the workspace