Pranav borrows a sum of ₹598397 at the rate of 20% per annum simple interest. At the end of the first year, he repays ₹24284 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 at the end of the second year?

Question

Accepted Answer

Step 1: Calculate interest for the first year on the full principal.
Interest for 1 year = Principal × Rate × Time = 598397 × 20% × 1 = 598397 × 0.20 = ₹119679.4

Step 2: Pranav repays ₹24284 towards principal at the end of the first year.
Remaining principal after first year = 598397 - 24284 = ₹574113

Step 3: Interest for the second year is calculated on the remaining principal.
Interest for 2nd year = 574113 × 20% × 1 = 574113 × 0.20 = ₹114822.6

Step 4: Interest accrued during the first year (₹119679.4) is still unpaid and must be paid at the end of the second year along with the second year's interest and the remaining principal.

Step 5: Total amount to be paid at the end of the second year = Remaining principal + Interest for 1st year + Interest for 2nd year
= 574113 + 119679.4 + 114822.6 = ₹808615

However, the options do not include ₹808615 as the correct answer, so let's re-check calculations carefully.

Recalculation:
Interest 1st year = 598397 × 0.20 = 119679.4
Principal repaid = 24284
Remaining principal = 598397 - 24284 = 574113
Interest 2nd year = 574113 × 0.20 = 114822.6
Total payment at end of 2nd year = 574113 + 119679.4 + 114822.6 = 808615

This matches option 1, ₹808615.

Therefore, the correct answer is ₹808615.

Answer

Answer

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