Question

Mr. Britto borrowed ₹ 28,000 for 2 years. The rate of interest for the two successive years are 8% and 10% respectively. If he repays ₹ 5240 at the end of the first year, find the outstanding amount at the end of the second year.

Answer 1

Principal [P] = ₹ 28000 

Time [T] = 2 years

Rate [R] = 8% for 1^st year and 10% for 2^nd year.

Now we can not to it directly using the C.I formula so let’s use S.I formula. 

∴ Interest of 1^st year

`I = ((P xx R xxT)/100)` 

`I = (28000 xx 8 xx 1)/100`

I = ₹ 2240

So the Amount [A] will be 

A = 28000 + 2240 (P + I) = 30240 

Now, Mr. Brito pays ₹ 5240 extra, so we’ll have to minus it with the amount of 1^st year.

⇒ P for 2^nd year [A] = 30240 – 5240 = ₹ 25000

Now, we have the P, R and T for 2^nd year.

∴ The interest for the second year is:

`I_2 = (P_2 xx R_2 xx T)/100`

`I_2 = (25000 xx 10 xx 1)/100`

 I₂ = 2500

So the Amount for 2^nd year

= 25000 + 2500 

= 27500

Hence, the outstanding amount at the end of 2^nd year will be ₹ 27500.