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A man borrows Rs. 6,000 at 5% C.I. per annum. If he repays Rs. 1,200 at the end of each year, find the amount of the loan outstanding at the beginning of the third year.

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Question

A man borrows Rs. 6,000 at 5% C.I. per annum. If he repays Rs. 1,200 at the end of each year, find the amount of the loan outstanding at the beginning of the third year.

Sum
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Solution

Given that the amount borrowed = Rs. 6,000.

Rate per annum = 5%

Interest on Rs. 6,000 = `5/100` × Rs. 6,000 = Rs. 300

So, amount at the end of the first year = Rs. 6,000 + Rs. 300 = Rs. 6,300

Amount left to be paid = Rs. 6,300 - Rs. 1,200 = Rs. 5,100.

Interest on Rs. 5,100 = `5/100` × Rs. 5,100 = Rs. 255

So, amount at the end of the second year = Rs. 5,100 + Rs. 255 = Rs. 5,355.

Amount left to be paid = Rs. 5,355 - Rs. 1,200 = Rs. 4,155.

Hence, the amount of the loan outs tan ding at the beginning of the third year is Rs. 4,155.

shaalaa.com
Concept of Compound Interest - Compound Interest as a Repeated Simple Interest Computation with a Growing Principal
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Chapter 2: Compound Interest (Without using formula) - Exercise 2 (B) [Page 33]

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Selina Concise Mathematics [English] Class 9 ICSE
Chapter 2 Compound Interest (Without using formula)
Exercise 2 (B) | Q 4 | Page 33

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