Question

A person borrowed some money on compound interest and returned it in four years in equal installments. If the rate of interest is $15\%$ p.a. and annual installment is Rs. $320000$, find the sum borrowed.

• A. Rs. $620$
• B. Rs. $617.49$
• C. Rs. $620.14$
• D. Rs. $637$

Answer 1

The correct option is B Rs. $617.49$

Let $L$ be the sum borrowed.
Given, $N=4,E=15\%$
Since EMI $=320000$
We have $320000=L\times \frac{15}{100}\left[\frac{{(1+\frac{15}{100})}^4}{{[1+\frac{15}{100}-1]}^4}\right]$
$L=$ Rs. $617.49$