A man borrows Rs. 820 and undertakes to pay back with compound interest @ 5% p.a. in 2 equal yearly instalments at the end of first and second year. What is the amount of each installment?
Rs.156
Rs. 241
Rs. 546
Rs. 441
Explanation:
Here, (1 + r) = 1 + 120=2120120=2120
Ratio of principals of two instalments = 1 : 20212021 = 21 : 20
Sum of ratios = 21 + 20 = 41
Principal of first instalment = 21412141 x 820 = Rs. 420
Therefore, Instalment = Principal of first instalment x (1 + r)
= 420 x 21202120 = Rs. 441
Here, (1 + r) = 1 + 120=2120120=2120
Ratio of principals of two instalments = 1 : 20212021 = 21 : 20
Sum of ratios = 21 + 20 = 41
Principal of first instalment = 21412141 x 820 = Rs. 420
Therefore, Instalment = Principal of first instalment x (1 + r)
= 420 x 21202120 = Rs. 441