Question

Kunal borrows Rs. 9,000 at 5% compound rate of interest. He pay back Rs. 1350 at the end of each year to clear his debt.find the amount he should pay to clear all his dues at the end of the second year.
1. Rs. 5657
2. Rs. 8532
3. Rs. 8050
4. Rs. 8505

Answer 1

Correct Answer - Option 4 : Rs. 8505

Given

Principal = Rs. 9,000

Calculation

Simple interest = (9000 × 5 × 1)/100

⇒ 450

Amount paid at the end of 1st year = Rs. 1350

Amount outstanding for second year = 9000 + 450 - 1350

⇒ Rs. 8100

Interest for second year = (8100 × 5 × 1)/100

⇒ Rs 405

Amount should be pay at the end of second year = 8100 + 405

⇒ Rs. 8505

∴ Amount due at the end of second year is Rs. 8505