Question

A man borrows Rs.10,000 at 10% compound interest compounded yearly. At the end of each year, he pays back 30% of the sum borrowed. How much money is left unpaid just after the second year ?

Answer 1

For 1^st year :
P = Rs. 10,000; R = 10% and T = 1 year

Interest = Rs. `[10,000 xx 10 xx 1]/100`= Rs.1,000

Amount at the end of 1^st year = Rs. 10,000 + Rs. 1,000 = Rs. 11,000

Money paid at the end of 1^st year = 30% of Rs. 10,000 = Rs. 3,000

∴ Principal for 2^nd year = Rs. 11,000 - Rs. 3,000 = Rs. 8,000

For 2^nd year :

P = Rs. 8,000; R = 10% and T = 1 year

Interest = Rs. `[8,000 xx 10 xx 1]/[100]` = Rs. 800

Amount at the end of 2^nd year = Rs. 8,000 + Rs. 800 = Rs. 8,800

Money paid at the end of 2^nd year = 30% of Rs. 10,000 = Rs. 3,000

∴ Principal for 3^rd year = Rs. 8,800 - Rs. 3,000 =Rs. 5,800.