Pranav borrows a sum of ₹335180 at the rate of 13% per annum at simple interest. At the end of the first year, he repays ₹23060 towards the return of the 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?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 396269.
Simple Interest = (P × R × T)/100
Interest for 1st year = (335180 × 13 × 1)/100 = ₹43573.40
Remaining Principal = Original Principal - Repayment = ₹335180 - ₹23060 = ₹312120
Interest for 2nd year = (312120 × 13 × 1)/100 = ₹40575.60
Total Amount = Remaining Principal + First Year Interest + Second Year Interest
= ₹312120 + ₹43573.40 + ₹40575.60 = ₹396269
Therefore, Pranav pays ₹396269 at the end of the second year.