Sneha borrows 6,000 at 5% compound interest. She repays 1200 at the end of each year. Find the amount of the loan outstanding at the beginning of the third year. What is the loan at the end of the third year?
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Answer:
P=6000 per month , R=5%
After 1 year
Interest=
100
PRT
=
100
6000×5×1
=300
New principle will be 6000+300=6300 but Rs 1200 was repaid
⟹P
′
=6300−1200=5100
After 2 years
Interest=
100
P
′
RT
=
100
5100×5×1
=255
Principle for 3
rd
year =5100+255=5355 but again Rs 1200 was repaid
∴ Outstanding =5355−1200
=4155
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