Question

16. Peter borrows $ 12,000 for 2 years at 10%
p.a. compound interest. He repays * 8,000 at
the end of first year. Find :
(i) the amount at the end of first year, before
making the repayment.
(ii) the amount at the end of first year, after
making the repayment.
(iii) the principal for the second year.
(iv) the amount to be paid at the end of
second year, to clear the account.​

Answer 1

Given principal for the first year = Rs 12000 Amount after 2 years = Rs 12730.80 Hence n = 2, let rate of interest = R% (1)  Interest at the end of 1st year,                Principal in the beginning of 2nd year = P + I                                                                   = Rs 12000 + Rs 360                                                                  = Rs 12360 (2)   Compound interest on the sum of 3 years         Hence compound interest on the sum of three years = Rs 13112.70 – Rs 12000                                                                                   = Rs 1112.70