Question

A man borrows 15000 at 14% per annum compound interest. HE repays 4 100 at the end of thr first yesr and 5220 at the end of second year.Find the amount of loan outstanding at the beginingof the third year.

Answer 1

$$\begin{gathered} \mathbf{FOR}\mathbf{}\mathbf{FIRST}\mathbf{}\mathbf{YEAR}\mathbf{}: \\ \mathrm{Principal},\mathrm{P}=\mathrm{Rs}15000 \\ \mathrm{Rate},\mathrm{R}=14\% \\ \mathrm{Time},\mathrm{T}=1\mathrm{Yr} \\ \mathrm{Now},\mathrm{Interest}=\frac{\mathrm{PRT}}{100}=\frac{15000\times 14\times 1}{100}=\mathrm{Rs}2100 \\ \mathrm{Now},\mathrm{amount}=\mathrm{principal}+\mathrm{interest}=15000+2100=\mathrm{Rs}17100 \\ \mathrm{Since}\mathrm{the}\mathrm{man}\mathrm{pays}\mathrm{Rs}4100\mathrm{at}\mathrm{the}\mathrm{end}\mathrm{of}\mathrm{first}\mathrm{year},\mathrm{then} \\ \mathrm{principal}\mathrm{for}\mathrm{second}\mathrm{year}=\mathrm{Rs}17100-4100=\mathrm{Rs}13000 \\ \mathbf{FOR}\mathbf{}\mathbf{SECOND}\mathbf{}\mathbf{YEAR}: \\ \mathrm{P}=\mathrm{Rs}13000;\mathrm{R}=14\%;\mathrm{T}=1\mathrm{yr} \\ \mathrm{Interest}=\frac{13000\times 14\times 1}{100}=\mathrm{Rs}1820 \\ \mathrm{amount}=13000+1820=\mathrm{Rs}14820 \\ \mathrm{Since}\mathrm{the}\mathrm{man}\mathrm{pays}\mathrm{Rs}5220\mathrm{at}\mathrm{the}\mathrm{end}\mathrm{of}\mathrm{second}\mathrm{year},\mathrm{then} \\ \mathrm{principal}\mathrm{for}\mathrm{third}\mathrm{year}=\mathrm{Rs}14820-5220=\mathrm{Rs}9600 \\ \mathrm{So},\mathrm{amount}\mathrm{of}\mathrm{loan}\mathrm{outstanding}\mathrm{at}\mathrm{the}\mathrm{beginning}\mathrm{of}\mathrm{the}\mathrm{third}\mathrm{year}=\mathrm{Rs}9600 \end{gathered}$$