Question

Amit borrowed 20,000 at 12% per annum
compound interest. If he pays 40% of the sum
borrowed at the end of the first year and 40%
of the sum borrowed at the end of the second
year, find the amount of loan outstanding at the
beginning of the third year.( With full solution)​

Answer 1

Step-by-step explanation:

40/100 x 20,000 = 8000

P = 20,000

R = 12%

I = 20000 x 1 x 12 / 100

I = 2400

A at end of year 1 = 22400

Amit paid 8000 so pending money for second year will be 22400-8000 = 14,400

P = 14,400

R = 12%

I = 14400 x 1 x 12 / 100

I = 1728

A at the end of second year = 14400 + 1728 = 16128

Amit paid off 8000 again.

So remaining money is 16128-8000= 8120

(You can use the compound interest formula for both cases to get the same answer)