Multiple choice

A small business owner has a debt of ₹1,19,600 due in 4 years. The debt is to be repaid in annual installments, with a simple interest rate of 10% per annum. What will be the annual installment (X) that the owner has to pay every year to discharge his debt?

  1. Rs. 24,000

  2. Rs. 26,000

  3. Rs. 27,500

  4. Rs. 28,700

  5. Rs. 24,700

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The total amount to be repaid is 1,19,600. With simple interest at 10% over 4 years, the annual installment X is calculated using the formula for installment with simple interest: P = X * n + (X * r * n * (n-1)) / (2 * 100). Solving for X with P=119600, n=4, r=10 gives X = 26,000.