A loan is to be returned in two equal yearly installments, if the rate of interest is 5% p.a. (compounded annually) and each installment is Rs. 14553, then 75% of the total interest (nearest to 1 Rs.) charges in the scheme is?
Answer & explanation
Correct answer: option 3
Rate of interest = 5% = \(\frac{1}{20}\)
ATQ,
I year 20 × 21 21 × 21
II year 400 441
(squ.) --------------------------------
420 + 400 441 + 441
P → 820 882 → A
Total interest = 882 - 820 = 62
441 R → 14553
62 R → \(\frac{14553}{441}\) × 62 = Rs. 2046
75% of 2046 = 1534.5 = ∼ 1535