Multiple choice

Ravi has a due debt of Rs. 16,500 from a bank, due in 3 years at 10% per annum simple interest, and he agrees to pay it back in 3 equal annual installments. What is the amount of each installment?

  1. Rs. 5,400

  2. Rs. 4,500

  3. Rs. 5,000

  4. Rs. 6,800

  5. Rs. 7,000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

To find the installment, use the formula for equal annual installments under simple interest: P = [I * (1 + r*t1) + I * (1 + r*t2) + I * (1 + r*t3)], where I is the installment. Solving 16500 = I * (1 + 0.1*2) + I * (1 + 0.1*1) + I * (1 + 0.1*0) leads to 16500 = 3.3I, giving I = 5000.

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