
A sum of Rs. 10,000 is borrowed at 8% per annum compounded annually. If the amount is to be paid in three equal installments, what will be the annual installment?
Answer
521.4k+ views
1 likes
Hint: In his type of question use the concept that the amount is borrowed it has to pay in three equal installments so this is equal to (first installment / (1 + rate of interest)) + (second installment / (1 + rate of interest) ) + (third installment / (1 + rate of interest) ), so use this concept to reach the solution of the question.
Complete step-by-step answer:
Rs.
Given data:
Sum of money which is borrowed = Rs. 10,000
Rate of interest at which it is borrowed = 8% per annum compounded annually.
Now it is given that the amount is paid in three equal installments.
Now we have to calculate the annual installment such that the amount is paid in three equal annual installments.
Let the annual installment be Rs. X.
So the amount borrowed = (first installment / (1 + rate of interest)) + (second installment / (1 + rate of interest) ) + (third installment / (1 + rate of interest) ).
As all the installments are the same, the first installment = second installment = third installment = X.
Now substitute the values we have,
Now simplify this equation we have,
So this is the required installment he has to pay in each year such that the amount is paid in three equal annual installments.
Note: Whenever we face such types of questions if he has to pay a single amount in after three years then the amount he has to pay is equal to , where P is the amount which he borrowed, r is the rate of interest and n is the period of time.
Recently Updated Pages
Master Class 12 Business Studies: Engaging Questions & Answers for Success

Master Class 12 English: Engaging Questions & Answers for Success

Master Class 12 Economics: Engaging Questions & Answers for Success

Master Class 12 Social Science: Engaging Questions & Answers for Success

Master Class 12 Maths: Engaging Questions & Answers for Success

Master Class 12 Chemistry: Engaging Questions & Answers for Success

Trending doubts
In Indian rupees 1 trillion is equal to how many c class 8 maths CBSE

How many ounces are in 500 mL class 8 maths CBSE

Name the states through which the Tropic of Cancer class 8 social science CBSE

How many ten lakhs are in one crore-class-8-maths-CBSE

What is the value of e infty class 8 maths CBSE

Explain land use pattern in India and why has the land class 8 social science CBSE
