Multiple choice

Vinod borrows 4000 rupees at 10\% compound interest. At the end of every year, he pays back 1000 rupees. How much amount should he pay at the end of the third year to clear all his debt?

  1. 3014

  2. 2024

  3. 3814

  4. 3224

  5. None of these

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

After each year, the outstanding amount grows by 10% compound interest, then 1000 is paid. Year 1: 4000 × 1.10 = 4400 - 1000 = 3400. Year 2: 3400 × 1.10 = 3740 - 1000 = 2740. Year 3: 2740 × 1.10 = 3014, which is the final payment to clear the debt.