Question

8 A sum of 6600 was taken as a loan. This is to be
repaid in two annual installments. The rate of interest
is 20%, which compounded annually. Find the value
of each installment.
(a) 4320 (b) 2220
(c) 4400
(d) 4420​

Answer 1

Answer :

Rs 4320

Given :

• A sum of 6600 was taken as a loan. This is to be repaid in two annual installments. The rate of interest is 20%

To find :

• The value of each installment.

Solution :

let the value of each installment be Rs x

then,

(p. w. of Rs x due to 1 year hence) = 6600 Rs

=> x/(1 + 20/100) + x/(1 + 20/100)² = 6600

=> 5x/6 + 25x/36 = 6600

=> 55x = 36 x 6600

=> x = (36 x 6600/55)

=> x = 4320 Rs

=> The value of each installment is 4320 Rs

=> Option a is a right option