Multiple choice

Surekha borrowed a sum of money and returned it in two equal annual installments of Rs. 5,547 each. If the rate of interest was 7(1/2)% p.c.p.a. compounded yearly, then the total interest paid by her was:

  1. Rs. 1,134

  2. Rs. 1,126

  3. Rs. 1,185

  4. Rs. 1,158
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Using the present value formula for equal installments: P = 5547/(1 + 7.5/100) + 5547/(1 + 7.5/100)². This gives P = 5160 + 4800 = Rs 9,960. Total amount paid = 5547 × 2 = Rs 11,094. Interest = 11094 - 9960 = Rs 1,134. Option A is correct.

Keep practicing — related questions