A farmer a loan of rs 15,000 at an annual interest rate of 8%. If the loan is to be repaid in three equal installments, what is the total interest paid?
Answer: 1200
Explanation
1. First, we need to calculate the interest amount for each installment.
Since the loan is to be repaid in three equal installments, the principal amount for each installment would be Rs 15,000 / 3 = Rs 5,000.
2. The interest for each installment can be calculated by multiplying the principal amount by the annual interest rate.
In this case, it would be Rs 5,000 * 0.08 = Rs 400.
3. Since there are three installments, the total interest paid would be Rs 400 * 3 = Rs 1,200.
Therefore, the total interest paid on the loan would be Rs 1,200.
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