A loan is to be returned in two equal yearly instalments. If the rate of interest is 10% p.a.. compounded annually and each instalment is ₹6534, then the total interest charged (in ₹) is:
Answer & explanation
Correct answer: option 3
Each installment = Rs.6534110
10% = \(\frac{1 }{10}\)
10 : 11 -----(1)
10² : 11²
Multiply equation (1) by 11.
10×11 : 11²
Total principal = 100 + 110 = 210
ATQ,
121R = 6534
1R = 54
Total amount paid = 242R = 242 × 54 = 13068
Total principal = 210R = 210 × 54 = 11340
Total interest charged = 13068 - 11340 = 1728