Question
Kamal took Rs. 6800 as a loan which along with interest is to be repaid in two equal annual installment. If the rate of interest is $$12\frac{1}{2}$$ % compounded annually, then the value of each installment is = ?
Answer: Option C
$$\eqalign{
& {\text{Rate of interest}} \cr
& {\text{r}} = {\text{12}}\frac{1}{2}\% = \frac{1}{8} \cr} $$
Year
Principal
Installment
⇒ I
8×9 →
9×9
......(i)
⇒ II
64 →
81
......(ii)
Since, installment is equal hence multiply equation (i) by 9
⇒ Total principal = 72 + 64 = 136 units
136 units → 6800
1 units → 50
81 units → 4050
⇒ Each installment = Rs. 4050
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$$\eqalign{
& {\text{Rate of interest}} \cr
& {\text{r}} = {\text{12}}\frac{1}{2}\% = \frac{1}{8} \cr} $$
Year
Principal
Installment
⇒ I
8×9 →
9×9
......(i)
⇒ II
64 →
81
......(ii)
Since, installment is equal hence multiply equation (i) by 9
⇒ Total principal = 72 + 64 = 136 units
136 units → 6800
1 units → 50
81 units → 4050
⇒ Each installment = Rs. 4050
Was this answer helpful ?
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