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Kamal took Rs 6800 as a loan which along with interest...

This question belongs to Arithmetic Ability Compound Interest
Compound Interest
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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 & Solution
Correct 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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1 Comment
Harshit Sharma
Harshit Sharma 6 years ago
why the principal and the installment is squared in 2 year
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