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Bishruta Bhowal

· started a discussion

· 1 Months ago

Bishruta (Question: 274676.0 )

If installments are monthly, why only r is used. It should be r/12

IF so, rate would be = 120/45%

Question:

Rajiv lend out Rs.9 to Suman on condition that the amount is payable in 10 months by 10 equal instalments of Rs.1 each payable at the start of every month. What is the rate of interest per annum if the first instalment has to be paid one month from the date of loan is availed.

Options:
A)

5%

B)

2.45%

C)

2.22%

D)

6 23   %

Solution:

Ans: (c)

Principal = Rs.9

Instalment = Rs.1

Rs.9 + Interest on Rs.9 for 10 months = (Rs.1 + Interest on Rs.1 for 9 months + Rs.1 + .....)

Rs.9 + Interest on Rs.9 for 10 months = Rs.10 + Interest on (9 + 8 + 7 + 6 + ..... + 1)

Interest on Rs.9 for 10 months = Rs.1 + Interest on 45 months

Rate of Interest = 100/45 = 2.22%

Vijay Sharma

· commented

· 1 Months ago

can u please tell me how to cover up this installment concept ??
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