₹1,380 has to be paid after 4 years. If four equal instalments are required with a simple interest of 10% on each instalment, then what is the value of each instalment?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. ₹300.
Let the value of each instalment = ₹x
First instalment interest = x × 10% × 3 = 0.3x
Total value = 1 + 0.3x = 1.3x
Second instalment interest = x × 10% × 2 = 0.2x
Total value = 1 + 0.2x = 1.2x
Third instalment interest = x × 10% × 1 = 0.1x
Total value = 1 + 0.1x = 1.1x
Fourth instalment interest = x × 10% × 0 = 0
Total value = 0 + x = x
Total amount paid = 1.3x + 1.2x + 1.1x + x = 4.6x
4.6x = 1380
x = 300