a man borrows RS 1200 at 10 percent per annum compound interest. if he repays RS 250 at the end of each year find the amount of loan outstanding at beginning of fourth year
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Given A man borrows RS 1200 at 10 percent per annum compound interest. if he repays RS 250 at the end of each year find the amount of loan outstanding at beginning of fourth year
- Given principal amount is Rs 1200
- Rate of interest r = 10%
- Interest after 1 year = 1200 x 10 x 1 / 100
- = Rs 120
- Total money owed after 1 year = 1200 + 120 = Rs 1320
- Now he repays Rs 250,
- So total money of second year will be 1320 – 250 = Rs 1070
- Now interest after 2nd year will be 1070 x 10 x 1 / 100
- = Rs 107
- Money after 2 years will be 1070 + 107
- = Rs 1177
- So he repays Rs 250
- Now total money of third year will be 1177 – 250
- = Rs 927
- Total money starting of third year = 927 x 10 x 1 / 100
- = Rs 92.7
- So money after 3 years = 927.0 + 92.7
- = Rs 1019.7
- So Rs 250 is repaid
- Total money starting of fourth year = 1019.7 – 250
= Rs 769.7
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