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Mathematics

A man borrows ₹ 10000 at 10% compound interest compounded yearly. At the end of each year, he pays back 20% of the amount for that year. How much money is left unpaid just after the second year ?

Compound Interest

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Answer

For first year :

P = ₹ 10000

R = 10%

T = 1 year

I = P×R×T100=10000×10×1100\dfrac{P \times R \times T}{100} = \dfrac{10000 \times 10 \times 1}{100} = ₹ 1000

Amount = P + I = ₹ 10000 + ₹ 1000 = ₹ 11000.

Amount paid back = 20% of the amount for that year

= 20100×11000\dfrac{20}{100} \times 11000 = ₹ 2200

Amount left to pay at end of first year = ₹ 11000 - ₹ 2200 = ₹ 8800.

For second year :

P = ₹ 8800

R = 10%

T = 1 year

I = P×R×T100=8800×10×1100\dfrac{P \times R \times T}{100} = \dfrac{8800 \times 10 \times 1}{100} = ₹ 880

Amount = P + I = ₹ 8800 + ₹ 880 = ₹ 9680.

Amount paid back = 20% of the amount for that year

= 20100×9680\dfrac{20}{100} \times 9680 = ₹ 1936

Amount left to pay at end of second year = ₹ 9680 - ₹ 1936 = ₹ 7744.

Hence, amount left to pay after second year = ₹ 7744.

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