Question

A man borrows rupees 6000 at 5% compound interest if he repays rupees 1200 at the end of each year find the amount outstanding at the beginning of the third year

Answer 1

Given Principle amount = Rs . 6000
And
Rate of interest = r = 5% compounded annually
So,
Interest after 1 year = 6000 × 5 × 1/100 = 60× 5 = Rs . 300
Total money owed after 1 year = 6000 + 300 = 6300
And
Rs. 1200 paid , So
Total money starting of second year = 6300 - 1200 = Rs.5100
And
Interest after 2 year = 5100 × 5 × 1/100 = 51× 5 = Rs . 255
money owned after 2 year = 5100 + 255 = 5355
And
Rs. 1200 paid , So
Total money outstanding starting of Third year = 5355 - 1200 = Rs.4155 ( Ans )