A sum of Rs 4620 is to be paid back in 2 equal annual instalments. How much is each instalment(in Rs) if the interest is compounded annually at 10% per annum?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 2662
P = Rs 4620
Rate of interest = 10% = 1/10
P → Installment
1st year → 10 → 11.........(1)
2nd year → 102 → 112 .........(2)
Installment will same in both years so multiply by 11 in eq 1.
1st year → 110 → 121
2nd year → 100 → 121
Here, P = 110 + 100 = 210 that is equal to the 4620
210 = 4620
1 = 22
So, installment = 22 × 121 = Rs 2662