312 Views

Question : Rajnish borrowed INR 1,500 from a bank and repaid the entire amount with interest in two equal annual instalments, the first instalment being paid a year after Rajnish borrowed from the bank. If the rate of interest was 40% per annum, compounded annually, then what was the value (in INR) of each instalment paid by Rajnish?

Option 1: 1125

Option 2: 1470

Option 3: 1225

Option 4: 1350


Team Careers360 24th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: 1225


Solution : Let the two equal instalments be $P_1$ and $P_2$
Given: $P_1 + P_2 = 1500$ and rate of interest $(R)= 40 \%$
Since annual instalments are equal,
So, $P_1(1+\frac{R}{100})=P_2(1+\frac{R}{100})(1+\frac{R}{100})$
⇒ $\frac{P_1}{P_2}=1+\frac{R}{100}=1+\frac{40}{100}=1+\frac{2}{5}=\frac{7}{5}$
⇒ $P_2 = \frac{5P_1}{7}$
Now, $P_1 + P_2 = 1500$
⇒ $P_1+\frac{5P_1}{7}= 1500$
⇒ $\frac{12P_1}{7}= 1500$
⇒ $P_1 = \frac{1500×7}{12}=875$
Installments = $P_1(1+\frac{R}{100})=875(1+\frac{40}{100})=875×\frac{7}{5}=1225$
Hence, the correct answer is 1225.

SSC CGL Complete Guide

Candidates can download this ebook to know all about SSC CGL.

Download EBook

Know More About

Related Questions

TOEFL ® Registrations 2024
Apply
Accepted by more than 11,000 universities in over 150 countries worldwide
Manipal Online M.Com Admissions
Apply
Apply for Online M.Com from Manipal University
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books