A loan of Rs. 48,800/- is to be paid back in three equal annual instalments. If the rate of inter

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18 Oct 2010 Find the instalment

A loan of Rs. 48,800/- is to be paid back in three equal annual instalments. If the rate of
interest is 25% per annum compounded annually, find the instalment.

OPtion

1) 23000
2) 12000
3) 20000
4) 25000
5) 24500
6) 25600
7) 23800
8) 24800
9) 28000
10) 22000

Solution

Let the instalment be Rs x
Present values of 1st, 2nd and 3rd instalments are
are (4/5)x, (4/5)^2x, (4/5)^3x
so (4/5)x [1 + 4/5 + 16/25] = 48800
OR x = 25000
so each instalment = Rs. 25000

Correct Option: 4 Best Solution (7)

MP    13 years AGO

A loan of Rs. 48,800/- is to be paid back in three equal annual instalments. If the rate of
interest is 25% per annum compounded annually, Amount after one year = 48800+12200 =61000, Instalment paid =25000, balance = 36000, Amount after 2 years = 36000+9000 =45000, instalment paid = 25000, balance = 20000, Amount after 3 years = 20000+5000=25000, Instalment paid =25000, balance = nil. so instalment is Rs. 25000 .

Like? Yes (2) | No   

Dr.Dipin Singh   13 years AGO

If x is each instalment, then present value of all three instalments should be equal to 48800.
Means 48800 = x *4/5 +x*16/25+x*64/125; then x=25000.. option 4

Like? Yes (4) | No (3)  

Trishita Dasgupta   13 years AGO

Let the instalment be Rs. x.
Present values of 1st, 2nd and 3rd instalments are
(4/5).x, (4/5)^2.x, (4/5)^3.x.
Therefore, (4/5).x[1+(4/5)+(16/25)]=48800
or, x= 48800*(125/244)=25000..... Option 4)

Like? Yes (1) | No   

ASHOK ROY   13 years AGO

Let the instalment be Rs. x.
Present values of 1st, 2nd and 3rd instalments are
(4/5).x, (4/5)^2.x, (4/5)^3.x.
Therefore, (4/5).x[1+(4/5)+(16/25)]=48800
or, x= 48800*(125/244)=25000..... Option 4)

Like? Yes (1) | No   

Dolly   13 years AGO

If x is each instalment, then
x*(4/5+16/25+64/125)= 48800 or x= 25000

Like? Yes (1) | No   

HARMEET KAUR   13 years AGO

48800 = I*(4/5 +16/25+64/125) , then I= 25000

Like? Yes (1) | No (1)  

Mamon Sengupta   13 years AGO

Let the instalment be Rs. x.
Present values of 1st, 2nd and 3rd instalments are
(4/5).x, (4/5)^2.x, (4/5)^3.x.
Therefore, (4/5).x[1+(4/5)+(16/25)]=48800
or, x= 48800*(125/244)=25000..... Option 4)

Like? Yes (1) | No (1)