Compound Interest Practice Test 2

Question : 4 of 40

Marks: +1, -0

A sum of Rs 91,000 is borrowed at 20% per annum compounded annually. If the amount is to be paid in three equal installments, the annual installment will be:

Rs 43,680
Rs 43,860
Rs 42,680
Rs 43,800

Validate

Solution:

P = Rs 91,000; R = 20%; T = 1 year
Amount

= 91,000 (1+20/100)^3

=91000×6/5×6/5×6/5

= Rs 1,57,248
Annual Installments

={100A}/{100t+({rt(r-1)}/2)}

={100×1,57,248}/{100×3+({20×3(3-1)}/2)}

={1,57,24,800}/360=43,680

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