Question

What annual installment will discharge a debt of Rs. 4200 due in 5 years at 10% SI?

• A. Rs. 600
• B. Rs. 700
• C. Rs. 800
• D. Rs. 900

Answer 1

Answer: (B)

Rs. 700

M = Rs. 4200, n =5, y =1, r =10%, a=?
$M=na+\frac{ra}{100\times y}\times \frac{n(n-1)}{2}$

$4200=5a+\frac{10a}{100\times 1}\times \frac{5\times (5-1)}{2}$

$6a=4200$

$a=Rs.700$
$\therefore$ Annual instalment = Rs. 700.