A man has to discharge a debt of ₹15,600 which is due in 3 years at 4% simple interest per annum. If he pays this amount in equal instalments of annual payment, find the amount for annual payment.

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SSC Selection Post 2024 (Matriculation Level) Official Paper (Held On: 24 Jun, 2024 Shift 4)
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  1. ₹5,200
  2. ₹5,100
  3. ₹5,400
  4. ₹5,000

Answer (Detailed Solution Below)

Option 4 : ₹5,000
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Detailed Solution

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  Given:

Debt (P) = ₹15600

Time (T) = 3 years

Rate of interest (R) = 4% per annum

Formula used:

The formula to calculate the annual instalment (I) to discharge a loan with simple interest is:

I = (p × 100) / [ ( n × 100) +{(n-1) + (n-2) +......+1 } × R]

p = principal

n= number of years

R =rate of interest in %

I = annual installment

Calculation:

⇒ I = (15600 × 100) / [ ( 3 × 100) +{(3-1) + (3-2)  } × 4]

⇒ I = (₹15600 × 100) / [300 +{2+1}× 4]

⇒ I =(₹15600 × 100) /[300 +12]

⇒ I = (₹15600 × 100)/312

∴ The correct annual instalment is ₹5,000 

The correct answer is option (4), ₹5,000

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