Question

Please answer this question of compound interest

Answer 1

Solution:-

P = Rs. 6000, R = 12 % p.a., N = 2 years

Interest after 1st year = P(1 + R/100)ⁿ - P
⇒ 6000(1 + 12/100)¹ - 6000
⇒ {(6000*28)/25} - 6000
⇒ 6720 - 6000
Interest after 1st year = Rs. 720

Amount owed after 1st year = (Rs. 6000 + Rs. 720) - Rs. 3000
= 6720 - 3000 
= Rs. 3720
So, total amount to be paid after 1st year is Rs. 3720

Interest after 2nd year = 3720(1 + 12/100)¹ - 3720
⇒ {(3720*28)/25} - 3720
⇒ (104160/25) - 3720
⇒ 4166.40 - 3720
Interest after 2nd year = Rs. 446.40
Total amount owed after the 2nd year = (Rs. 3720 + Rs. 446.40) - Rs. 3000
= 4166.40 - 3000
= rs.1166.40
So, after 2nd repayment, he still has to pay Rs. 1166.40
Answer.