Question

Rs. 8,000 is lent out at 7% compound interest for 2 years. At the end of the first year Rs. 3,560 are returned. Calculate :

(i) the interest paid for the second year.

(ii) the total interest paid in two years

(iii) the total amount of money paid in two years to clear the debt.

Answer 1

(i) For 1^st year

P= Rs8,000; R=7% and T=1year

Interest= Rs= Rs560

Amount= Rs8,000+ Rs560= Rs8,560

Money returned= Rs3,560

Balance money for 2^nd year= Rs8,560- Rs3,560= Rs5,000

For 2^nd year

P= Rs5,000; R=7% and T=1year

Interest paid for the second year= Rs= Rs350 Ans.

(ii)The total interest paid in two years= Rs350 + Rs560

= Rs910 Ans.

(iii) The total amount of money paid in two years to clear the debt

= Rs8,000+ Rs910

= Rs8,910 Ans.