What annual installment will discharge a debit of ₹5,664 in 4 years at 12% simple interest?
Answer & explanation
Correct answer: option 3
Let equal installment = 100 Rs
Rate = 12%
Payable amount in First year=Principal = Rs 100
Payable amount in second year = Principal + Interest
= 100 + 12 % of 100
= 100 + 12
= Rs 112
Payable amount in third year= Principal + Interest
= 100 + 24 % of 100
= 100+ 24
= Rs 124
Payable amount in fourth year= Principal + Interest
= 100 + 36 % of 100
= 100+ 36
= Rs 136
Payable amount = 100 + 112 + 124 + 136 = 472
A.T.Q
472R = Rs.5664
1R = Rs.12
Hence,
100R = Rs.1200