Question

What annual installment will discharge a debt of 1815 due in 3 years at 10% simple interest?

• A. 500
• B. 520
• C. 550
• D. 580

Answer 1

The correct option is C 550

Let each installment be $Rs.x$

$1styear=[x+\frac{(x\times 10\times 2)}{100}]$

$2ndyear=[x+\frac{(x\times 10\times 1)}{100}]$

$3rdyear=x$

Therefore,

$x+x+\frac{x\times 10\times 2}{100}+x+\frac{x\times 10\times 1}{100}=1815$

$3x+\frac{x\times 10\times 2}{100}+\frac{x\times 10\times 1}{100}=1815$

$x=550$

Hence, each installment $=Rs.550$.