A sum of Rs.6,000 is to be paid back in two equal annual instalments; each instalment is to be paid at the end of every year. How much is each instalment if the interest is compounded annually at 2% p.a.? (Rounded off up to two decimal places)
Answer & explanation
Correct answer: option 2
Principal = Rs. 6000
2% = \(\frac{1 }{50}\)
50 : 51 -----(1)
50² : 51²
Multiply equation (1) by 11.
50×51 : 51²
Total principal = 2550 + 2500 = 5050
ATQ,
5050R = 6000
1R = \(\frac{6000}{5050}\)
51² R = 51 × 51 × \(\frac{6000}{5050}\)
= Rs. 3090.30