Question

Sultan took a loan from the bank at 8% per annum, and was supposed to pay a sum of Rs.2240 at the end of 4 years. If the same sum is cleared off in four equal annual installments at the same rate, the amount of annual installment will be

• A. Rs.500
• B. Rs.550
• C. Rs.600
• D. Rs.1000

Answer 1

Answer: (A)

Rs.500

Answer 2

Let the amount of annual installment be 'P'

The amount for 1 year,

⇒ $P+\frac{P×1×8}{100}=\frac{27P}{25}$

The amount for 2 years,

⇒ $P+\frac{P×2×8}{100}=\frac{29P}{25}$

The amount for 3 years,

⇒ $P=\frac{P×3×8}{100}=\frac{31P}{25}$

From the given question,

∴ $\frac{27P}{25}+\frac{29P}{25}+\frac{31P}{25}=2240$

⇒ $\frac{27P+29P+31P}{25}=2240$

⇒ $\frac{112P}{25}=2240$ ⇒ $P=\frac{2240×25}{112}=500$

Hence, option A is the correct answer.The correct option is (A): Rs.500