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Question : A man borrows Rs. 4,000 from a bank at 10% per annum simple interest and clears the debt in three years. If the instalments paid at the end of the first, and second year to clear the debt are Rs. 1,500, and Rs. 2,500, respectively, what amount (in Rs.) should be paid at the end of the third year to clear the debt?

Option 1: 700

Option 2: 650

Option 3: 500

Option 4: 550


Team Careers360 6th Jan, 2024
Answer (1)
Team Careers360 23rd Jan, 2024

Correct Answer: 650


Solution : For the first year,
Principal, P = Rs. 4000
Rate, R = 10%
Time, T = 1 year
Simple interest = $\frac{\text{P} \times \text{R} \times \text{T}}{100}$ = $\frac{4000 \times 10 \times 1}{100}$ = Rs. 400
Remaining amount after the installment is paid = Rs. 4000 – Rs. 1500 = Rs. 2500
For the second year,
Principal, P = Rs. 2500
Rate, R = 10%
Time, T = 1 year
Simple interest = $\frac{\text{P} \times \text{R} \times \text{T}}{100}$ = $\frac{2500 \times 10 \times 1}{100}$ = Rs. 250
Remaining amount after the installment is paid = Rs. 2500 – Rs. 2500 = Rs. 0
The amount left to be paid for the third year = Total simple interest in two years
= Rs. 400 + Rs. 250 = Rs. 650
Hence, the correct answer is 650.

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