Sohan borrows a sum of Rs 1,41,545 at the rate of 11% per annum simple interest. At the end of the first year, he repays Rs 25,490 towards the return of the principal amount borrowed. If Sohan clears all pending dues at the end of the second year, including interest payments that accrued during the first year, how much does he pay (in Rs) at the end of the second year?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 1,44,391.
Simple interest = PRT/100
Interest for the first year,
⇒ SI = (141545 × 11 × 1)/100 = 15569.95
Remaining principal after the first payment,
⇒ P = 141545 - 25490 = 116055
Interest for the second year on the remaining principal,
⇒ SI = 116055 × 11/100 = 12766.05
Total amount to be paid at the end of the second year = 15569.95 + 116055 + 12766.05
⇒ 144391