Question
A man borrowed ₹10,000 at an interest rate of 12% per
annum compounded annually. He repaid ₹4,000 at the end of the first year. What amount should he pay at the end of the second year to clear his debt?Solution
Amount at the end of the first year = 10,000 × (1 + 12/100) = ₹11,200. Remaining principal after repaying ₹4,000 = ₹11,200 - ₹4,000 = ₹7,200. Amount at the end of the second year = 7,200 × (1 + 12/100) = ₹7,200 × 1.12 = ₹8,064. Correct option: a
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