Rashid borrowed Rs 15000 at the rate of 10 p a rate of compound interest compound annually He repaid...........

Quantitative Aptitiude (CLAT) Compound Interest

Rashid borrowed Rs. 15000 at the rate of 10% p.a. rate of compound interest, compound annually. He repaid a certain amount at the end of the first. Then he paid Rs. 12100 at the end of the 2nd year to completely discharge the loan. What amount did he repay at the end of 1st year?

4500

5500

6500

5800

Explanation:

Rs. 15000 borrowed at 10% p.a. will become Rs. 16500 at the end of the 1st year. Let k be the amount repaid at the end of the first year. Then the balance is Rs. 16500 - k will become the principal for the second year.

⇒ 110% of (16500 – k) = 12100

⇒ 16500 – k = 11000

⇒ k = Rs. 5500.