Question

Archana borrowed Rs 18,000 from Ritu at 12% p.a. compound interest. If at the end of the 1^st, 2^nd, and 3^rd years, Archana returned Rs 5,250, Rs 5,875 and Rs 6,875 respectively, find the amount Archana has to pay Ritu at the end of the 4^th year to clear her debt.

Answer 1

P = Rs. 18,000, R = 12 °/o p.a.

Interest for first year 

`= ("Rs"  18000 xx 12 xx 1)/100`

= Rs 2,160 
Amount due after 1" year

= Rs. 18,000 + Rs. 2, 160 = Rs 20,160 

Amount paid after 1st year = Rs. 5,250 

Balance amount = Rs. 20, 160 - Rs. 5,250 = Rs. 14,910 

Interest for seoond year

`= ("Rs"  14910 xx 12 xx 1)/100`

= Rs 1789.20 
Amount due after 2nd year

=Rs. 14,910 + Rs. 1,789.20

= Rs 16,699.20

Amount paid after 2nd year = Rs. 5,875 

Balance amount = Rs. 16,699.20- Rs. 5,875 = Rs. 10,824.20 

Interest for third year

`= ("Rs"  10824.20 xx 12 xx 1)/100`

= Rs 1,298.904 
Amount due after 3rd year

= Rs. 10,824.20 + Rs. 1,298.904 = Rs 12, 123.10 

Amount paid after 3rd year = Rs. 6,875 

Balance amount = Rs. 12, 123.10- Rs. 6,875 = Rs. 5,248.104 

Interest for fourth year

`= ("Rs"  5248.104 xx 12 xx 1)/100`

= Rs 629.7725

Amount due after 4th year =Rs. 5,248.104 +Rs. 629.7725 = Rs 5877 .876 

=Rs 5877.87 

Archana needs to pay Rs 5877 .87 to Ritu at the end of 4th year to clear