Question

Rajiv lend out rs. 9 to anni on condition that the amount is payable in 10 months by 10 equal instalments of re. 1 each payable at the start of every month. What is the rate of interest per annum if the first instalment has to be paid one month from the date the loan is availed

Answer 1

Answer:

Step-by-step explanation:

The amount payable per month is 1

We analyze this as follows.

Let the interest rate be i.

We analyze this as follows :

Let x be the amount paid monthly.

Let L be the amount of loan.

The formula is :

L = X(1 + i)

Doing the substitution :

9 = 1(1 + i)^ 10

9^ (1/10= = 1 + i

1.2457 = 1 + i

i = 1.2457 - 1

i = 0.2457

i = 0.2457 × 100%

= 24.57%

Answer 2

Answer:

13.3% p.a

Step-by-step explanation:

Principal amount = Rs 9

Amount is payable in 10 months by 10 equal instalments of Rs 1 each:

Total amount paid = 10 x 1 = Rs 10

Find the interest paid:

Interest paid = Total amount paid - Principal

Interest paid = 10 - 9 = Rs 1

Find the interest rate:

Interest rate paid for the 10 months = 1/9 x100 = 100/9 %

Find the interest rate for the year:

10 months = 100/9

1 month = 100/9 ÷ 10 = 10/9

12 months = 10/9 x 12 = 13.3%

Answer: The interest rate is 13.3% p.a.