A sum of Rs.2310 is due to be repaid at the end of two years. If it has to be repaid in two equal annual instalments (the instalments being paid at the beginning of the year) at 10% p a. compounded annually, find the value of each instalment.

 

  • Option 1)

     

    Rs.1210                       

     

  • Option 2)

     

     Rs.1000                  

     

  • Option 3)

     

     Rs.1100                

     

  • Option 4)

     

    Rs.1110  

     

  • Option 5)

     

        Rs.1331

     

Answers (1)

 

If a sum of Rs.2310 is due to be repaid at the end of two years. If it has to be repaid in two equal annual installments (the installments being paid at the beginning of the year) at 10% p a. compounded annually, Then the value of each installment is:

Installment = \frac{amount }{no\: o\! f \: installment+\left ( t-1 \right )}\times R\: ^{0}/_{0}

\frac{2310}{2}+ (1) \times \frac{1}{10}

2310 \times \frac{10}{21} = 1100

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