A loan of ₹ 8,925 is to be paid back in two equal half-yearly instalments. How much is each instalment if the interest is compounded half-yearly at 8% per annum?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. ₹ 4,732
Given:
Interest rate = 8%
Interest rate for semi annually = 4%
Calculations:
For 4% = 1/25
According to the question,
Total installment = 8925
⇒ 1275 units = 8925
⇒ 1 unit = 7
Required each installment = 7 × 676 = ₹ 4732