Mr. Dubey borrows ₹ 100000 from State Bank of India at 11% per annum compound interest. He repays ₹ 41000 at the end of first year and ₹ 47700 at the end of second year. Find the amount outstanding at the beginning of the third year.
Solution:
It is given that
Borrowed money (P) = ₹ 100000
Rate = 11% p.a.
Time = 1 year
We know that
Amount after first year = Prt/100
Substituting the values
= (100000 × 11 × 1)/ 100
By further calculation
= 100000 + 11000
= ₹ 111000
Amount paid at the end of first year = ₹ 41000
So the principal for second year = 111000 – 41000
= ₹ 70000
We know that
Amount after second year = P + (70000 × 11)/ 100
By further calculation
= 70000 + 700
= ₹ 77700
So the amount paid at the end of second year = ₹ 47700
Here the amount outstanding at the beginning year = 77700 – 47700
= ₹ 30000
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