Question

A man borrows Rs. 10,000 at 10% compound interest compounded yearly. At the end of each year, he pays back 20% of the amount for the year. How much money is left unpaid just after the second year?

• A. $Rs.8,769$
  
• B. $Rs.7,744$
• C. $Rs.6,614$
  
• D. $Rs.5,859$
  

Answer 1

The correct option is B $Rs.7,744$

Sum=Rs.10,000

Rate of interest=10%

Interest for one year$=\frac{10000\times 10\times 1}{100}=Rs.1000$

Total amount$=10000+1000=Rs.11000$

At the end of first year he pay =20% of 11000$=\frac{20}{100}\times 11000=Rs.2200$

Amount left$=11000-2200=Rs.8800$

$\therefore$ Interest for second year$=\frac{8800\times 1\times 10}{100}=Rs.880$

Total amount aftre 2 year$=8800+880=Rs.9680$

At the end of second year he pay=$20\%of9680=\frac{20}{100}\times 9680=Rs.1936$

He pay again rs 3000 then the amount left$=9680-1936=Rs.7744$