Question

Mr. Dubey borrows Rs. $100000$ from state Bank of India at $11\%$ per annum compound interest. He repays Rs. $41000$ at the end of first year and Rs. $47700$ at the end of second year. Find the amount outstanding at the beginning of the third year in Rs.

Answer 1

$P=100000$ , $R=11\%$

At the end of $1$ year

Interest $=\frac{PRT}{100}=\frac{100000\times 11\times 1}{100}=11000$

Amount $=P+I=111000$

Repaid Amount $=41000$

Outstanding after $1$ year $=111000-41000=70000$

Since it is Compound Interest, Principle will be Outstanding (or amount) of previous year,

$P^{{}^{\prime }}=70000$

$I=\frac{P^{{}^{\prime }}RT}{100}=\frac{70000\times 11\times 1}{100}=7700$

$A=77700$

$RA=47700$

Therefore Outstanding at start of $3$ year$=77700-47700=30000$