Question
Download Solution PDFA person borrowed ₹2,000 at 5% annual simple interest repayable in 3 equal annual installments. What will be the annual installment?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFGiven:
Principal = Rs.2000
Rate = 5 % and time = 3 years
Formula used:
Installment =
Where A = Amount, R = rate, and N = number of years
Calculation:
S.I = (P × R × T)/100
⇒ (2000 × 5 × 3)/100 = 300
Amount (A) = 2000 + 300 = Rs.2300
Installment =
⇒ 2300 × 100/[3 × 100 + (2 + 1) × 5]
⇒ 230000/315 = 46000/63
⇒ 730
∴ The correct answer is ₹730
Mistake Points We calculate installment on Amount,
Here, Principal is 2,000.
Hence first we need to find the Amount, using the Simple Interest formula,
and then solve the question.
Last updated on Jul 19, 2025
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