Multiple choice

Find the annual installment that will discharge a debt of Rs. 17200 due in 4 years ar 5% per annum simple interest.

  1. Rs. 3500

  2. Rs. 4000

  3. Rs. 3000

  4. Rs. 4500
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For simple interest, each installment of Rs. x is paid at end of years 1, 2, 3, 4. Interest on first installment for 3 years, second for 2 years, third for 1 year: Total = x(1 + 1.05 + 1.10 + 1.15) = 17200. Using x = 4000: 4000(1 + 1.05 + 1.10 + 1.15) = 4000 × 4.30 = 17200. Option B is correct.

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