Question

If a loan of Rs. 30,000 is to be paid in 5 annual installments with interest rate of 12% p.a. then the equal annual installment will be;

Answer 1

Step-by-step explanation:

{30000+(30,000×12%×5)}÷5=480,00÷5=9600 is the annual install

Answer 2

The equal installment amount is Rs 9600

Solution:

Given that,

Principal amount = Rs 30, 000

Rate of interest = 12 % per annum

Number of installments = 5

Interest for 1 year = 12 % of 30, 000

$\text{ Interest for 1 year } = \frac{12}{100} \times 30000\\\\\text{ Interest for 1 year } = 12 \times 300\\\\\text{ Interest for 1 year } = 3600$

Total interest for 5 year = 5 x 3600 = 18000

Total amount at end of 5 years = 18000 + 30000 = 48000

$Equal\ annual\ installment = \frac{48000}{5} = 9600$

Thus, the equal installment amount is Rs 9600

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