A man borrowed Rs. 25,220/- and promise to pay in 3 equal yearly installments at 5% p.a. compound interest. Find amount of each installment.
Answer & explanation
Correct answer: option 1
5% → \(\frac{1}{20}\)
Principal : Installment
1st ⇒ 20 : 21
2nd ⇒ 400 : 441
3rd ⇒ 8000 : 9261
* Installment amount for each year should be same*
Therefore,
Principal : Installment
1st ⇒ 20 : 21 ) × 441
2nd ⇒ 400 : 441 ) × 21
3rd ⇒ 8000 : 9261 ) × 1
Principal : Installment
1st ⇒ 8820 : 9261
2nd ⇒ 8400 : 9261
3rd ⇒ 8000 : 9261
Sum ⇒ 25220 : 9261 (Each Installment)
↓ ↓
×1 ×1
↓ ↓
25220(given) 9261