Pranav borrows a sum of ₹6,23,305 at the rate of 10% per annum simple interest. At the end of the first year, he repays ₹16,390 towards return of principal amount borrowed. If Pranav clears all pending dues at the end of the second year, including interest payment that accrued during the first year, how much does he pay (in ₹) at the end of the second year?
₹7,29,937
Problem:
Pranav borrows a sum of ₹6,23,305 at 10% per annum simple interest. At the end of the first year, he repays ₹16,390 towards the principal. If he clears all remaining dues at the end of the second year, including interest from the first year, how much does he pay?
Solution:
Step 1: Interest for the First Year
Simple Interest = (Principal × Rate × Time) / 100
SI₁ = (6,23,305 × 10 × 1) / 100 = ₹62,330.50
Step 2: Remaining Principal after Year 1
Remaining Principal = 6,23,305 − 16,390 = ₹6,06,915
Step 3: Interest for the Second Year
SI₂ = (6,06,915 × 10 × 1) / 100 = ₹60,691.50
Step 4: Total Payment at End of Second Year
- Remaining Principal = ₹6,06,915
- Interest for 1st year = ₹62,330.50
- Interest for 2nd year = ₹60,691.50
Total = 6,06,915 + 62,330.50 + 60,691.50 = ₹7,29,937
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