Compound Interest

Quantitative Aptitude (SBI-PO)

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A sum of Rs. 5000 was taken as a loan and the amount is to be repaid in two equal annual installments. If the rate of interest be 10% compounded annually then find the value of each installment.

Rs.1859.4

Rs.1550.25

Rs.2330.5

Rs.2880.95

Explanation:

Let x be the annual payment.
X due to 1 year + x due to 2nd year = 5000
=> x/(11/10)^1 + x/(11/10)^2 = 5000
=> x=2880.95

Hence, option 4 is the correct answer.

By: Amit Kumar

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