A sum of Rs.550 was taken a loan. This is to be repaid in two equal annual instalments. If the rate of interest be 20% compounded annually, then the value of each instalment is :
Rs.421
Rs.396
Rs.360
Rs.350
Explanation:
Let the value of each instalment be Rs.x.
Then, x(1+20100)+x(1+20100)2=550x(1+20100)+x(1+20100)2=550
or 5x6+25x36=5505x6+25x36=550 or x = 360
Let the value of each instalment be Rs.x.
Then, x(1+20100)+x(1+20100)2=550x(1+20100)+x(1+20100)2=550
or 5x6+25x36=5505x6+25x36=550 or x = 360