Multiple choice

What annual payment will discharge a debt of Rs. 580 due in 5 years, if the rate the rate of interest is 8% per annum?

  1. Rs. 166.40

  2. Rs. 120

  3. Rs. 100

  4. Rs. 65.60
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

This is a problem of annual payments to discharge a debt. Using the formula for simple interest on installments, the annual payment P satisfies 5P + P * (0.08) * (4+3+2+1+0) = 580, which leads to 5P + 0.8P = 580, so 5.8P = 580, P = 100.

AI explanation

We use the formula for the annual installment to clear a debt: x equals (100 times A) divided by (100 times T plus R times T times (T minus 1) divided by 2), where A is the total debt of Rs. 580, R is 8%, and T is 5 years. Plugging in the values gives x equals (100 times 580) divided by (500 plus 8 times 5 times 4 divided by 2), which simplifies to 58000 divided by (500 plus 80). The installment amount is 58000 divided by 580, resulting in an annual payment of Rs. 100.

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