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Question
A man borrows Rs.20000 at 10% per annum compound interest payable annually. If he repays Rs.5000 at the end of the first year and Rs.10000 at the end of the second year; how much should he pay at the end of the third year in order to clear the account? Find the answer correct to the nearest rupee.
Solution
For 1st half year : P = Rs.2000, R = 10% and T = 1 year
Interest = Rs.`(20000 xx 10 xx 1)/(100)`
=Rs.2000
Amount
= Rs.20000 + Rs.2000
= Rs.22000
Money paid at the end of 1st half year = Rs.5000
Balance money for 2nd half year
=Rs.22000 - Rs.5000
= Rs.17000
For 2nd half year : P = Rs.17000; R = 10% and T = 1 year
Interest = Rs.`(17000 xx 10 xx 1)/(100)`
= Rs.1700
Amount
= Rs.17000 + Rs.1700
= Rs.18700
Money paid at the end of 2nd half year = Rs.10000
Balance money for 3rd half year
= Rs.18700 - Rs.10000
=Rs.8700
For 3rd half year : P = Rs.8700; R = 10% and T = 1 year
Interest = Rs.`(8700 xx 10 xx 1)/(100)`
= Rs.870
Amount
= Rs.8700 + Rs.870
=Rs.9570
A man should pay Rs.9570 at the end of 3rd year to clear the account.
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