A man borrows Rs. $6000$ at $5 %$ compound interest. If he repays Rs. $1200$ at the end of each year, find the amount outstanding at the beginning of the third year.

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Solution

$P = 6000$ per month , $R = 5 %$
After $1$ year
Interest $= \frac{P R T}{100}$
$= \frac{6000 \times 5 \times 1}{100}$
$= 300$
New principle will be $6000 + 300 = 6300$ but Rs $1200$ was repaid
$⟹ P^{^{'}} = 6300 - 1200 = 5100$
After $2$ years
Interest $= \frac{P^{^{'}} R T}{100}$
$= \frac{5100 \times 5 \times 1}{100}$
$= 255$
Principle for $3^{r d}$ year $= 5100 + 255 = 5355$ but again Rs $1200$ was repaid
$∴$ Outstanding $= 5355 - 1200$
$= 4155$

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A man borrows Rs. 6000 at 5% compound interest. If he repays Rs. 1200 at the end of each year, find the amount outstanding at the beginning of the third year.

A man borrows Rs. $6000$ at $5 %$ compound interest. If he repays Rs. $1200$ at the end of each year, find the amount outstanding at the beginning of the third year.