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· started a discussion

· 1 Months ago

How can we assume two installment as 2 years?

Question:

A sum of Rs. 210 was taken as a loan. This is to be paid back in two equal installments. If the rate of interest be 10% compounded annually, then the value of each installment is:

Options:
A) Rs.127
B) Rs.121
C) Rs.210
D) Rs.225
Solution:

Ans: (b)

Let x be the value of installment.

Principal = Present value of x for 1 year + Present value of x for 2 years


Knowledge Expert

· commented

· 1 Months ago

Dear student,
In question it is written annually, thus it will be taken as 2 years.
Keep learning,
Team TR