A builder borrows ₹ 2,550 to be paid back with compound interest at the rate of 4% per annum by the end of 2 years in two equal yearly instalments. How much will each instalment be?

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  1. ₹ 1,352
  2. ₹ 1,377
  3. ₹ 1,275
  4. ₹ 1,203 

Answer (Detailed Solution Below)

Option 1 : ₹ 1,352
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सामान्य हिंदी सेक्शनल टेस्ट 1
37 Qs. 74 Marks 20 Mins

Detailed Solution

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Amount ‘A’ = Rs. 2550

R = 4% per annum

n = 2 years

let the two equal instalment be x

⇒ Present worth = instalment/(1 + r/100)n

⇒ P1 + P2 = A

⇒ 25/26x + 625/676x = 2550

⇒ (650 + 625)x/676 = 2550

⇒ 1275/676 x = 2550

⇒ x = (2550 x 676) /1275The value

⇒ x = 1352

∴The Value of each instalment will be Rs. 1352

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