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Meera Borrowed Rs 12,500 on Compound Interest from Rajeev for 2 Years When the Rates of Interest for Successive Years Were 8% and 10%.

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Question

Meera borrowed Rs 12,500 on compound interest from Rajeev for 2 years when the rates of interest for successive years were 8% and 10%. If Meera returned Rs 7,500 at the end of the first year, find the amount she has to return at the end of the second year.

Sum
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Solution

P = Rs. 12,500, R = 8 °/o p.a.

Interest for first year 

= `("Rs"  12500 xx 8 xx 1)/100`

= Rs 1,000 

Amount due after 1st year =Rs. 12,500 +Rs. 1,000 =Rs 13,500 

Amount paid after 1st year= Rs. 7,500 

Balance amount= Rs. 13,500 - Rs. 7,500 =Rs. 6,000

Interest for second year when r = 10°/o p.a. 

`=( "Rs"  6000 xx 10 xx 1)/100`

= Rs 600 

Amount due after 2nd year

= Rs. 6,000 + Rs. 600 =Rs 6.600

Meera has to return Rs 6,600 to Rajeev at the end of second year 

shaalaa.com
Concept of Compound Interest - Compound Interest as a Repeated Simple Interest Computation with a Growing Principal
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