What annual installment will discharge a debt of ₹5,460 due in 5 years at 10% simple interest per annum?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is Option 3 i.e. ₹ 910.
Total debt = ₹5,460
Time = 5 years
Rate of interest = 10% per annum
Total Debt = P × (1 + 1 + 1 + 1 + 1) + P × 0.1 × (4 + 3 + 2 + 1)
Total Debt = 5P + 0.1P × 10 = 6P
⇒ 6P = 5460
⇒ P = 5460 / 6 = 910