Multiple choice

Nora decided to pay off a debt of $36,000 to CASA Bank by 40 annual installments, in the form of an A.P. When 30 installments had been paid, she died, leaving one third of the debt unpaid. What was the value of the first installment? (Assuming there is no rate of interest)

  1. $450
  2. $470
  3. $490
  4. $510
  5. $600
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Let the installments be a, a+d, ..., a+39d. Total sum = 36000. Sum of 40 terms = 20(2a + 39d) = 36000. After 30 installments, 1/3 of debt (12000) remains, so 24000 paid. Sum of 30 terms = 15(2a + 29d) = 24000. Solving the system gives a=510.

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