Compound and Simple Interest

Author Raj asked on 2022-01-16 18:15:33

A sum of money was borrowed at 6% per annum simple interest. At the end of first year Rs. 6800 was paid of and the rate of interest on the balance was reduced to 5% per annum. If the interest for the second year is 11/20? of the interest for the first year what was the original sum borrowed?

Let the amount of money lent out be Rs. P First Year interest = PRT/100 = P*6*1/100 = 0.06P Amount to be returned = P + 0.06 P = 1.06 P Amount returned = 6800 Balance Amount = 1.06P - 6800 Second year interest = (1.06P - 6800) * 5 * 1/100 = (1.06 P - 6800) /20 Given, Second year interest= 11/20 of 1st year interest= 11/20* 0.06 P Further, (1.06 P - 6800) /20 = 11* 0.06 P/20 1.06P - 6800 = 11*0.06P 0.4P = 6,800 P = 17,000

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Best Answer
authorsKiki Ralp answered 1 year ago

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authorAntawn Fiennes replied 1 year ago

Yub, I agree, it would make it so easy to clean up wasted space.
thanks

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