Why is the amount paid in Year 2 in Exhibit 2.2 different from the amount paid in Year 2 in Exhibit 2.1?

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Exhibit 2.1 Unequal instalments 1 A computer is bought from A King at the start of year 1. Cash price is £2,000. 2 Hire purchase price is £2,300. 3 Payable in two annual instalments at the end of each year. Each instalment to be £1,000 plus interest accrued for that year. 4 Rate of interest is 10 per cent per annum. Year 1: Cash price Add Interest 10% of (A) £2,000 Less Instalment paid Owing at end of year 1 Year 2: Add Interest 10% of (B) £1,000 Less Instalment paid Owing at end of year 2 (A) (B) £ 2,000 200 2,200 (1,200) 1,000 100 1,100 (1,100)