Question

Mr. X took a loan of Rs.50000 from Bank A. The bank charged 10% p.a. interest compounded on the decreasing amount. He paid back the entire loan amount with interest in two equal annual instalments. Find the instalments.

• A. Rs. 25928.57
• B. Rs. 28809.52
• C. Rs. 31690.48
• D. Cannot be determined

Answer 1

The correct option is B Rs. 28809.52

If each of the instalment is P, then

1.1P + P = 50000 × 1.1²

⇒ 2.1P = 50000 × 1.1²

⇒ P ≈ Rs. 28809.52.