₹ 8000 is lent out at 7% compound interest for 2 years. At the end of the first year ₹ 3560 are returned. Calculate :

(i) the interest paid for the second year.

(ii) the total interest paid in two years

(iii) the total amount of money paid in two years to clear the debt.

(i) For first year :

P = ₹ 8000

R = 7%

T = 1 year

I = $\dfrac{P \times R \times T}{100} = \dfrac{8000 \times 7 \times 1}{100}$ = ₹ 560.

Amount = P + I = ₹ 8000 + ₹ 560 = ₹ 8560.

Amount paid back at end of first year = ₹ 3560

Amount left = ₹ 8560 - ₹ 3560 = ₹ 5000.

For second year :

P = ₹ 5000

R = 7%

T = 1 year

I = $\dfrac{P \times R \times T}{100} = \dfrac{5000 \times 7 \times 1}{100}$ = ₹ 350.

Amount = P + I = ₹ 5000 + ₹ 350 = ₹ 5350

Hence interest paid in second year = ₹ 350.

(ii) Total interest paid in two years = ₹ 350 + ₹ 560 = ₹ 910.

Hence, total interest paid in two years = ₹ 910.

(iii) Amount of money paid in two years to clear the debt = Amount at end of 2nd year + Money paid back at end of first year

= ₹ 5350 + ₹ 3560 = ₹ 8910.

Hence, total amount of money paid in two years to clear the debt = ₹ 8910.