Find the Value of Each Installment

A sum of 210 was taken as a loan. This is to be paid back in two equal installments. If the rate of interest is 10% compounded annually, then the value of each installment is

  1. ₹ 127
  2. ₹ 121
  3. ₹ 210
  4. ₹225
Nitin Baudh Learner Asked on 23rd July 2015 in Maths.
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1 Answer(s)

Answer: (1) Rs.127
Explanation:-
Principal = Rs.210, Rate = 10%.
The loan has to be paid two installment, It is take two years.
Then, Compound interest = P [1 + R/100]2 = 210 (1 + 10/100)2
= 210 x (1 + 1/10)2
= 210 x (11/10)2
= 210 x 11 x 11/10 x 10
= 254
It is equal installment,
Then, 254/2 = Rs.127
Hence, the value of each installment  is Rs.127.

Anurag Mishra Professor Answered on 23rd July 2015.
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