Question

Gautam takes a loan of ₹ 16,000 for 2 years at 15% p.a. compound interest. He repays ₹ 9,000 at the end of first year. How much must he pay at the end of second year to clear the debt?

Answer 1

Loan taken(P)= Rs. 16000

Rate(R)=15%p.a.

Time(T)= 2 years

∴

Interest for the first year

=

P

T

R

100

=

16000

×

15

×

1

100

=

R

s

.

2400

Amount after one year=Rs. 16000 + 2400

=Rs. 18400

At the end of one year amount paid back

=Rs. 9000

Balance amount= Rs. 18400 -9000

=Rs. 9400

Interest for the second year=

9400

×

15

×

1

100

=Rs. 1410

Amount after second year=Rs. 9400 +1410

=Rs. 10810

Answer 2

Answer:

Gautam must pay Rs.10810 at the end of second year to clear the debt.

Step-by-step explanation:

To solve the problem, we use the formula for Compound interest.

$A=P(1+\frac{r}{n})^{nt}$

Where

A = Final amount

P = initial principal amount

r = interest rate

n = number of times interest applied per time period.

t = number of time periods elapsed

Here given values are,

$P=16000$

$r=15$%

Also, it is given that at the end of first year 9000 is repaid.

So final amount after first year is

$A=16000(1+\frac{0.15}{1})^{1}$

$A=16000(1.15)$

$A=18400$

Amount of 9000 is repaid,

So the amount will be

$18400-9000=9400$.

For second year,

So the principal amount will be 9400.

The final amount will be

$A=9400(1+\frac{0.15}{1})^{1}$

$A=9400(1.15)$

$A=10810$.

To clear the debt, he must pay Rs.10810 at the end of second year.