Question
Download Solution PDFA man borrowed ₹15,400 at 15% per annum compound interest. At the end of every year, he pays ₹2,500 as part repayment. How much (in ₹) does he still owe after three such instalments?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFGiven:
Principal (P) = ₹15,400
Rate of interest (r) = 15% per annum
Annual installment = ₹2,500
Number of years = 3
Formula used:
Amount after 1 year = P(1 + r/100) - installment
Repeat the process for subsequent years.
Calculation:
After 1st year:
⇒ A = 15,400 × (1 + 15/100) - 2,500
⇒ = 15,400 × 1.15 - 2,500
⇒ = 17,710 - 2,500 = ₹15,210
After 2nd year:
⇒ A = 15,210 × 1.15 - 2,500
⇒ = 17,491.50 - 2,500 = ₹14,991.50
After 3rd year:
⇒ A = 14,991.50 × 1.15 - 2,500
⇒ = 17,240.225 - 2,500
⇒ = ₹14,740.225
∴ The man still owes ₹14,740.225 after three years.
Last updated on May 29, 2025
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