Tenzin borrows ₹20,000 at 12% per annum simple interest and clears the loan with a single payment at the end of 2 years 6 months. How much does he pay?

Explanation

1. 01

   2 years 6 months = 2.5 years.

2. 02

   $\text{SI} = \frac{20000 \times 12 \times 2.5}{100} = 6000$.

3. 03

   Payment = ₹20,000 + ₹6,000 = ₹26,000.