Sohan borrows a sum of ₹1,41,545 at the rate of 11% per annum simple interest. At the end of the first year, he repays ₹25,490 towards return of principal amount borrowed. If Sohan 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?
1,44,391
Step 1: Calculate the total interest for the first year
Sohan borrows ₹1,41,545 at 11% simple interest per annum. The interest for the first year is:
Interest = Principal × Rate × Time
Interest = ₹1,41,545 × 11% × 1
Interest = ₹1,41,545 × 0.11 = ₹15,570.
Step 2: Principal remaining after first year repayment
At the end of the first year, Sohan repays ₹25,490 towards the principal. The remaining principal after the first year is:
Remaining Principal = ₹1,41,545 − ₹25,490 = ₹1,16,055.
Step 3: Calculate the interest for the second year
The interest for the second year is calculated on the remaining principal of ₹1,16,055 at the same rate (11%):
Interest = ₹1,16,055 × 0.11 = ₹12,766.05 (approximately ₹12,766).
Step 4: Total payment at the end of the second year
At the end of the second year, Sohan must repay the remaining principal and the total interest accrued over the two years:
Total Payment = Remaining Principal + Interest (Year 1) + Interest (Year 2)
Total Payment = ₹1,16,055 + ₹15,570 + ₹12,766 = ₹1,44,391.
Thus, the correct answer is ₹1,44,391.
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