Question

A man borrows Rs 10000 at 5% per annum compound interest . He repays 35% of the sum borrowed at the end of the first year and 42% of the sum borrowed at the end of the second year. How much must he pay at the end of the third year in order to clear the debt ?

Answer 1

Here’s your answer buddy:

For the first year
P
1
​
=10,000,R=5%
A
1
​
=10,000(1+
100
5
​
)
=10000×
100
105
​

=Rs.10500
At the end of the first year he repay 35% of the sum borrowed so he repay the amount=10000×
100
35
​
=Rs3500
left amt=10000−3500=Rs.7000
For the second year
P
2
​
=Rs.7000, R=5%
A
2
​
=7000(1+
100
5
​
)
=7000×
100
105
​

=Rs.7350
At the end of the second year he repay 42% of the sum borrowed so he repay the amt=10000×
100
42
​
=Rs.4200
Left amt=7350−4200=Rs.3150
For the Third year
P
3
​
=Rs.3150,R=5%
A
3
​
=3150(1+
100
5
​
)
=3150×
100
105
​

=Rs.3307.50
Hence he pay Rs. 3307.50 at the end of the third year in order to clear the debt.