Pranav borrows a sum of ₹6,23,305 at the rate of 10% per annum simple interest. At the end of the first year, he repays ₹16,390 towards return of 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?

Question

Accepted Answer

Step 1: Calculate interest for the first year on the full principal.
Interest for 1st year = Principal × Rate × Time = 6,23,305 × 10% × 1 = ₹62,330.5

Step 2: At the end of the first year, Pranav repays ₹16,390 towards principal. So, the remaining principal after first year = 6,23,305 - 16,390 = ₹6,06,915

Step 3: Interest accrued during the first year (₹62,330.5) is still unpaid and will be paid at the end of the second year.

Step 4: Calculate interest for the second year on the remaining principal:
Interest for 2nd year = Remaining principal × Rate × Time = 6,06,915 × 10% × 1 = ₹60,691.5

Step 5: Total amount to be paid at the end of the second year = Remaining principal + Interest for 1st year + Interest for 2nd year
= 6,06,915 + 62,330.5 + 60,691.5 = ₹7,29,937

Step 6: However, the question states that Pranav clears all pending dues including interest accrued during the first year at the end of the second year. The repayment of ₹16,390 at the end of the first year was only towards principal, so the interest for the first year remains unpaid and is added to the second year's dues.

Step 7: The total payment at the end of the second year is ₹7,29,937.

Note: The options given have ₹7,29,025 and ₹7,29,937 close to each other. Rechecking calculations:
- Interest 1st year = 6,23,305 × 0.10 = 62,330.5
- Principal after 1st year = 6,23,305 - 16,390 = 6,06,915
- Interest 2nd year = 6,06,915 × 0.10 = 60,691.5
- Total = 6,06,915 + 62,330.5 + 60,691.5 = 7,29,937

Therefore, the correct answer is ₹7,29,937.

Answer

Answer

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