A person borrowed ₹2,000 at 5% annual simple interest repayable in 3 equal annual installments. What will be the annual installment?

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SSC CGL 2022 Tier-I Official Paper (Held On : 13 Dec 2022 Shift 3)
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  1. ₹730
  2. ₹840
  3. ₹640
  4. ₹250

Answer (Detailed Solution Below)

Option 1 : ₹730
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SSC CGL Tier 1 2025 Full Test - 01
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Detailed Solution

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Given:

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. 

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