Question

Peter borrows ₹ 12,000 for 2 years at 10% p.a. compound interest. He
repays ₹8,000 at the end of first year. Find:
(i) the amount at the end of first year, before making the repayment.
(ii) the amount at the end of first year, after making the repayment.
(iii) the principal for the second year.
(iv) the amount to be paid at the end of second year, to clear the account

Answer 1

Answer:

Sum borrowed = ₹12000

Rate (R) = 10% p.a. compounded annually

Time (T) = 2 Years

Interest for the first year = PRT/100

= (12000 × 100 × 1)/100 = ₹ 1200

(i) Amount = ₹ 12000 + 1200 = ₹13200

Amount paid = ₹8000

(ii) Balance amount = ₹ 13200 – 800 = ₹5200

(iii) ∴ Principal for the second year = ₹5200

(iv) Interest for the second year = (5200 × 10 ×1)/100

= ₹ 520

∴ Amount = ₹ 5200 + 520 = ₹5720

hope it helps you