2017 · Q26
A sum of ₹ 8,400 was taken as a loan. This is to be paid in two equal instalments. If the rate of interest is 10% per annum, compounded annually, then the value of each instalment is
Elementary MathematicsSimple and Compound Interest
- A₹ 4,200
- B₹ 4,480
- C₹ 4,840
- DNone of the above
Explanation
If each instalment is ₹x: 8400 = x/1.1 + x/1.1² = x(1.1 + 1)/1.21 = 2.31x/1.331, so x = 8400 × 1.331/2.31 = ₹4,840: option C. (UPSC's official key accepts C or D for this item.) Option A (₹4,200) ignores interest.