Question

If Rs. 8550 is paid in two equal installments at the rate of $11\frac{1}{9}$% per annum compound interest, then find each installment (in Rs.).

• A. Rs.5000
• B. Rs.6000
• C. Rs.7000
• D. Rs.8000

Answer 1

The correct option is A Rs.5000

Given,
$11\frac{1}{9}$% $=\frac{1}{9}$

Let, each installment be Rs. X, then

$8550=\frac{X}{(1+\frac{1}{9})}+\frac{X}{{(1+\frac{1}{9})}^2}$

$\Rightarrow 8550=\frac{X}{\frac{10}{9}}+\frac{X}{\frac{100}{81}}$

$\Rightarrow 8550=X\left(\frac{90+81}{100}\right)$

$\Rightarrow$ X = 5000

Hence, option (A) is the correct answer.