Ashok borrowed Rs 12000 at some rate percent compound interest. After a year, he paid Rs 4000 back. If compound interest for second year be Rs 920, find:
i. rate of interest charged
ii. the amount of debt at the end of the second year.
Find without using formula.

Dear student
It is difficult to calculate without using formula.
So, I am showing the solution of the question with the help of formula
i) Principal=Rs12000After 1 year he paid back Rs 4000Let the rate of interest be r.Hence the principal after 1 year =120001+r100-4000Now it is given that C.I. for 2nd year=920Hence 120001+r100-40001+r100=120001+r100-4000+9201+r100=120001+r100-4000+920120001+r100-40001+r100=8920+120r8000+120rr100=8920+120r8000+120r-1r100=9208000+120r120r2+8000r-92000=03r2+200r-2300=03r2-30r+230r-2300=03rr-10+230r-10=03r+230r-10=0Since rate cannot be negative.hence r=10Rate of interest =10%(ii)Now initial Principal=12000C.I. for 1st year=120001+10100-12000=13200-12000=Rs1200C.I. for 2nd year=920Hence sum of principal and interest of both years=12000+1200+920=Rs14120But he paid back 4000Hence amount o debt at the end of 2nd year=14120-4000=Rs10120

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