Question

John borrowed Rs. 2,10,000 from a bank at an interest rate of 10% per annum, compounded annually. The loan was repaid in two equal instalments, the first after one year and the second after another year. The first instalment was interest of one year plus part of the principal amount, while the second was the rest of the principal amount plus due interest thereon. Then each instalment, in Rs., is​

Answer 1

Each installment =  Rs 121000

Step-by-step explanation:

Amount = 210000

Interest Rate = 10 %

Interest for 1 Year = 210000 * 10 * 1 /100

= 21000

Let say Installment Paid = E

Then Amount Left to Paid = 210000 + 21000 - E

= 231000 - E

Interest in 2 nd Year  = (10/100) (231000 - E)

= 0.1 * (231000 - E)

Amount to be paid = (231000 - E) + 0.1 * (231000 - E)

=> 1.1  (231000 - E) = E

=> 2.1 E = 1.1  (231000)

=> E =  121000

each installment =  Rs 121000

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