Question

A man took some loan from a private bank at the rate of 5% compound interest p.a. and he repayed the whole amount of the loan by paying Rs. 6300 and Rs. 8820 at the end of first year and of second year respectively. How much was the sum of the loan?

Answer 1

hope it will find you helpful

Answer 2

Given:

Rate R = 5% p.a.

Amount paid after first year = Rs. 6300

Amount paid after second year = Rs. 8820

To find:

How much was the sum of the loan?

Solution:

Let,  sum of the loan = P

So, interest on P = (P × 1 × 5) / 100 = P/20

Amount = P + P/20 = 21P/20

Amount paid after first year = Rs. 6300

So, Amount left = 21P/20 - 6300

Amount after second year = (21P/20 - 6300)(1 + 5/100)

= (21P/20 - 6300)(21/20)

Amount paid after second year = Rs. 8820

Since all the amount is paid after second year.

Therefore, (21P/20 - 6300)(21/20) = 8820

21P/20 - 6300 = (8820 × 20) / 21

21P/20 - 6300 = 8400

21P/20 = 8400 + 6300

21P/20 = 14700

P = (14700 × 20) / 21

P = 14000

Therefore, the money borrowed was Rs. 14000