Multiple choice

What annual instalment will discharge a debt of 6048 due in 3 years at 12% per annum simple interest?

  1. 1800 Rs

  2. 2000 Rs

  3. 2400 Rs

  4. 1833 Rs

  5. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

For simple interest, each installment is paid at year-end with interest on the remaining principal. If installment is x: First installment pays x + 12% of 6048 for 1 year on remaining amount, second pays x + 12% for 2 years, third pays x + 12% for 3 years. Total: 3x + 0.12x(3+2+1) = 3x + 0.72x = 3.72x = 6048. So x = 6048/3.72 = 1800. Each installment is Rs. 1800.

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