Ranbir borrows Rs. $20, 000$ at $12$ % per annum compound interest. If he repays Rs. $8400$ at the end of the first year and Rs. $9680$ at the end of the second year, find the amount of loan outstanding at the beginning of the third year.

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Solution

Given that Ranbir borrows Rs.20000 at 12% compound interest.
For First year
Interest $I = \frac{20000 \times 1 \times 12}{100} = R s .2400$
Thus amount after one year $= R s .20000 + R s .2400 = R s .22400$
$∴$ Money repaid $= R s .8400$
$∴$ Balance $= R s .22400 - R s .8400 = R s .14000$
For Second year
Interest $I = \frac{14000 \times 1 \times 12}{100} = R s .1680$
Thus amount after one year $= R s .14000 + R s .1680 = R s .15680$
Ranbir paid Rs.9680 at the end of second year.
$∴$ Loan outstanding at the beginning of the third year $= R s .15680 - R s .9680 = R s .6000$

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Ranbir borrows Rs. 20,000 at 12% per annum compound interest. If he repays Rs. 8400 at the end of the first year and Rs. 9680 at the end of the second year, find the amount of loan outstanding at the beginning of the third year.

Ranbir borrows Rs. $20, 000$ at $12$ % per annum compound interest. If he repays Rs. $8400$ at the end of the first year and Rs. $9680$ at the end of the second year, find the amount of loan outstanding at the beginning of the third year.