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Question : A man borrowed Rs. 50,000 from a bank at 10% per annum, compounded annually. At the end of every year, he pays Rs. 15,000 as part payment of the loan and interest. How much does he still owe to the bank after three such instalments?

Option 1: Rs. 16,900

Option 2: Rs. 15,800

Option 3: Rs. 15,200

Option 4: Rs. 16,200


Team Careers360 17th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Rs. 16,900


Solution : At the end of the first year,
The remaining amount = (50000 × 1.1) – 15000 = 55000 – 15000 = Rs. 40000
At the end of the second year,
The remaining amount = (40000 × 1.1) – 15000 = 44000 – 15000 = Rs. 29000
At the end of the third year,
The remaining amount = (29000 × 1.1) – 15000 = 31900 – 15000 = Rs. 16900
So, after three such instalments, he still owes the bank Rs. 16,900.
Hence, the correct answer is Rs. 16,900.

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