Question

A sum of Rs. 550 is to be repaid in two equal installments. If the rate of interest be 20% compounded annually, then the value of each installment is

• A. Rs.390
• B. Rs.360
• C. Rs.275
• D. Rs.290
• E. Rs.400

Answer 1

The correct option is B

Rs.360

Let the amount of each installment be Rs.x

$x(\frac{100}{120}+{\left(\frac{100}{120}\right)}^2)$ = $550$

$x=Rs.360$