Find the total amount of debt that will be discharged by 5 equal instalments of ₹200 each, if the debt is due in 5 years at 5% p.a. at simple interest.
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. Rs. 1,100.
Amount of debt at end of 5 years = Sum of each instalment with SI till year 5
1st earns 4 years = 200 + 200 × 5 × 4 / 100 = 240
2nd earns 3 years = 200 + 200 × 5 × 3 / 100 = 230
3rd earns 2 years = 200 + 200 × 5 × 2 / 100 = 220
4th earns 1 year = 200 + 200 × 5 × 1 / 100 = 210
5th earns 0 year = 200
Total debt = 240 + 230 + 220 + 210 + 200 = 1100