Question

Nina borrows Rs. 7500 at 10% p.a. She pays Rs. 2800 at end of year 1 and Rs. 1500 at end of year 2. How much amount should she pay at end of year 3 to clear all her dues?
1. Rs. 5509.5
2. Rs. 4560.5
3. Rs. 4944.5
4. Rs. 5204.5

Answer 1

Correct Answer - Option 3 : Rs. 4944.5

Given:

P = Rs. 7500

R = 10%

N = 3 Years

Amount paid back at end of year 1 = Rs. 2800

Amount paid back at end of year 2 = Rs. 1500

Formula used:

A = P × {1 + (R / 100)}^N

Where P = Principal amount, R = Rate of interest in %, N = Number of years

A = P + I

Calculation:

Amount to be paid at end of 1st year = 7500 × {1 + (10 / 100)}

⇒ A = 8250

She pays Rs. 2800 at end of 1st year

⇒ Amount left = 8250 – 2800

⇒ Amount left = 5450

Amount at end of 2^nd year = 5450 × {1 + (10 / 100)}

⇒ Amount at end of 2^nd year = 5995

She paid Rs. 1500 at the end of 2^nd year

⇒ Amount left to pay = (5995 – 1500)

⇒ Amount left to pay at end of 2^nd year = Rs. 4495

Amount at end of 3^rd year = 4495 × {1 + (10 / 100)}

⇒ Amount at end of 3^rd year = 4944.5

∴ At the end of year 3 she need to pay Rs. 4944.5 to clear all her dues.