Question

What annual instalment will discharge a debt of Rs. $2710$ due in $4$ years at $7\%$ simple interest?

• A. Rs. $1000$
• B. Rs. $613$
• C. Rs. $225$
• D. Rs. $150$

Answer 1

The correct option is B Rs. $613$

Let the annual installment be $x$

Now, $x$ accumulates an interest of $7.1$ every year

$⟹$

$x$ deposited in first year becomes $1.21x$ in next $3$ years

$x$ deposited in second year becomes $1.11x$ in next $2$ years

$x$ deposited in first year becomes $1.07x$ in next $4$ years

$⟹1.21x+1.41x+1.07x+x=2710⟹4.92x=2710⟹x=Rs.613$