A sum of Rs. 550 was taken as a loan. This is to be repaid in two equal annual instalments. if the rate of interested be 20% compound annually then the value of each instalment is?
Correct Answer: Rs. 360
Explanation:
Let the value of each instalment be Rs. x
Then, {x/(1 + 20/100) + x/(1 + 20/100)2} = 550
⇒ 5x / 6 + 25x / 36 =550
⇒ 55x / 36 = 550
∴ x = 360
