Question

A man borrows Rs6000 for 2 years at the rate of 12% per annum compounded anually. He repays Rs3000 at the end of each year. How much does he still owes after his second payment?

Answer 1

Answer :
Borrowed money = Rs 6000
Rate of compound interest = 12%

After 1 year he owes money = 6000${\left(1+\hspace{0.17em}\frac{12}{100}\right)}^1$
= 6000 ( 1.12 )

= ​6720
Then he repay 3000 , and then he owes total money at the starting of second year = 6720 - 3000 = 3720
Now again , we find that ammount he owes after second year

= 3720 ​${\left(1+\hspace{0.17em}\frac{12}{100}\right)}^1$

= 3720 ( 1.12 )

= ​4166.4
And then he repay 3000 , then he owes total money after second payment
= 4166.4 - 3000

= Rs ​1166.4 ( Ans )