# Ashok borrowed rs 12000 at some rate percent Compound interest. After a year, he paid back rs 4000. If compound interest for the second year be rs 920 find: 1) The rate of interest charged 2) the amount of debt at the end of the second year

1
by sharif

2014-09-22T00:05:03+05:30

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Loan = Rs 12,000    Interest rate = r % compound

Amount after one year = Rs 12,000 ( 1 + r/100) = Rs 120 (100+r)
Amount paid back after one year = Rs 4,000
Balance Amount in the loan = Rs 120 (100+r) - 4,000 = Rs (8,000 + 120 r)

Compound Interest for 2nd year turns out to be same as simple interest on the above amount:

Rate of interest is 10%           (we ignore the negative root of quadratic equation)

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