Question

Mr. Dubey borrows ₹ 1,00,000 from State Bank of India at 11% per annum compound interest. He repays ₹ 41,000 at the end of first year and ₹ 47,700 at the end of the second year. Find the amount outstanding at the beginning of the third year.

Answer 1

Principal for first year = ₹ 100000, rate = 11%.

Interest for first year

= `(100000 xx 11 xx 1)/100`

= `(1100000)/100`

= ₹ 11000

Amount after first year

= ₹ 100000 + ₹ 11000

= ₹ 111000

Money refunded at the end of first year = ₹ 41000.

Principal for second year

= ₹ 111000 – ₹ 41000

= ₹ 70000

Interest for second year

= `(70000 xx 11 xx 1)/100`

= `(770000)/100`

= ₹ 7700

Amount after second year

= ₹ 70000 + ₹ 7700

= ₹ 77700

Money refunded at the end of second year = ₹ 47700.

Principal for third year = ₹ 77700 – ₹ 47700 = ₹ 30000.

Hence, the amount outstanding at the beginning of third year = ₹ 30000.