Question

Rahul borrows ₹ 25000 for 2 years and the rates of interest for two successive years are 10% and 8% respectively. If he repays ₹ 7500 at the end of first year, find the amount due at the end of second year.

Answer 1

Given:

• Rahul borrows ₹ 25000 for 2 years.
• Rate of interest for first year = 10%
• Rate of interest for second year = 8%
• He repays ₹ 7500 at the end of the first year.
• We need to find the amount due at the end of the second year.

Step-wise calculation:

1. Calculate the amount after the first year including interest:

Interest for 1st year = `(25000 xx 10 xx 1)/100` = ₹ 2500

Amount after 1st year = 25000 + 2500 = ₹ 27500

2. Subtract the repayment made at the end of the first year from the amount due:

Balance after repayment = 27500 – 7500 = ₹ 20000

3. Calculate the interest for the second year on the balance:

Interest for 2nd year = `(20000 xx 8 xx 1)/100` = ₹ 1600

4. Calculate the amount due at the end of the second year:

Amount due at end of 2nd year = 20000 + 1600 = ₹ 21600