ABC26GN4200 · Compound Interest
Subject: General Aptitude · Chapter: Compound Interest · Exam: · Marks: · Difficulty:
What annual payment will discharge a debt of ₹ 1025 due in 2 years at the rate of 5\% compound interest?
(a)₹ 550
(b)₹ 551.25
(c)₹ 560
(d)₹ 560.75
Answer
Explanation
Let each instalment be ₹ $x$. Then, $$\begin{aligned} & \frac{x}{\left(1+\frac{5}{100}\right)}+\frac{x}{\left(1+\frac{5}{100}\right)^{2}}=1025 \\ & \Leftrightarrow \frac{20 x}{21}+\frac{400 x}{441}=1025 \\ & \Leftrightarrow 820 x=1025 \times 441 \\ & \Leftrightarrow x=\left(\frac{1025 \times 441}{820}\right)=551.25 . \end{aligned}$$ So, value of each instalment $=₹ 551.25$.
Explanation as extracted from the printed page; notation may be imperfect.
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