Question

Anjali borrowed Rs. 25,000 at the rate of 10% per annum under compound interest. She repaid Rs. 15000 after one year. How much should she repay at the end of second year so that she clears the amount?
1. Rs. 13,900
2. Rs. 12,500
3. Rs. 13,750
4. None of the above

Answer 1

Correct Answer - Option 3 : Rs. 13,750

Given:

Anjali borrowed Rs. 25,000 at the rate of 10% per annum under compound interest.

Amount repaid after 1 year = Rs. 15,000

Formula used:

Amount after n years under compound interest = P[1 + (r/100)]^T

Calculation:

Amount that she needs to pay at the end of one year = 25000 [1 + (10/100)]

⇒ Rs. 27500

She repaid Rs. 15,000 at the end of one year

⇒ Rs. (27500 – 15000) = Rs. 12,500 = Principal for second year

Amount that he needs to pay to clear = 12500 (1 + 10/100)

⇒ Rs. 13750

∴ The required amount is Rs. 13,750