Mr Kumar borrowed Rs. 15000 for two years. The rates of interest for two successive years are 8% and 10% respectively. If he repays Rs. 6200 at the end of the first year, find the outstanding amount at the end of the second year.
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Solution
Here Principal, P = Rs. 15000
Rate of interest, R = 8% for first year and 10% for second year
Interest for 1st year = `(PxxRxxT)/100 = (15000 xx 8 xx 1)/100 = Rs 1200`
Amount at the end of first year = Rs. 15000 + 1200 = Rs. 16200
Kumar repays Rs. 6200 at the end of first year.
∴Principal for second year = Rs. 16200 – Rs. 6200 = Rs. 10000
Interest for second year = `(P xx R xx T)/100 = (10000 xx 10 xx 1)/100 = Rs 1000`
Amount at the end of second year = Rs. 10000 + Rs. 1000 = Rs. 11000
Concept: Concept of Compound Interest - Compound Interest as a Repeated Simple Interest Computation with a Growing Principal
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