A person borrows Rs. 1,00,000 from a bank at 10% per annum simple interest and clears the debt in five years. If the installment paid at the end of the first, second, third and fourth years to clear the debt are Rs. 10,000, Rs. 20,000, Rs. 30,000 and Rs. 40,000, respectively, what amount should be paid at the end of the fifth year to clear the debt?

Given:

A person borrows Rs. 1,00,000 from a bank at 10% per annum simple interest and clears the debt in five years.

The installment paid at the end of the first, second, third, and fourth years to clear the debt are Rs. 10,000, Rs. 20,000, Rs. 30,000, and Rs. 40,000

Concept used:

S.I = (P × T × R)/100

Here,

P = Principle

T = Time

R = Rate

Calculation:

1st year interest = 100000 × 10% = 10000

Principal amount after 1st year = 100000 - 10000 = 90000

2nd year interest = 90000 × 10% = 9000

Principal amount after 2nd year = 90000 - 20000 = 70000

3rd year interest = 70000 × 10% = 7000

Principal amount after 3rd year = 70000 - 30000 = 40000

4th year interest = 40000 × 10% = 4000

Principal amount after 4th year = 40000 - 40000 = 0

At the end of the fifth year, the person has to pay the total interest remaining:

Total Interest = 10000 + 9000 + 7000 + 4000 = 30000

So, the person should pay Rs. 30,000 at the end of the fifth year to clear the debt.