A man borrows Rs. 6000 at 5% interest, on reducing balance, at the start of the year. If he repays Rs. 1200 at the end of each year, find the amount of loan outstanding, in Rs., at the beginning of the third year.
Explanation:
After one year, amount due = 6000 × 1.05 – 1200 = 5100
Hence, amount due after two years = 5100 × 1.05 – 1200 = 4155
Hence, option (c).
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