A sum of Rs. 550 was taken as a loan. This is to be paid back in two equal installments. If the rate of interest be 20% compounded annually, then the value of each installment is :
Explanation:
Solution:
Let x = equal installment at the end of one year( rate% annually) .
Now 1st year,
P =550,
Interest = (550*20*1)/100 = 110.
Now, at the beginning of 2nd year,
P =550 + 110 – x
Interest at the end of 2nd year,
= [(660 – X) *20*1]/100 = 132 –x/5.
Hence,total installment,
2x = 550 + 110 + 132 – x/5
2x + x/5= 792
x = 360.
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By: Pranav Gupta