What annual payment will discharge a debt of  Rs.9760 due in 3 years at 25% per annum compound interest ?

# What annual payment will discharge a debt of  Rs.9760 due in 3 years at 25% per annum compound interest ?

1. A

5000

2. B

45000

3. C

5500

4. D

None

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### Solution:

Solution: Let the each installment be Rs ‘x’.  Then

$\begin{array}{l}⇒\frac{x}{\left(1+\frac{25}{100}\right)}+\frac{x}{{\left(1+\frac{25}{100}\right)}^{2}}+\frac{x}{{\left(1+\frac{25}{100}\right)}^{3}}=9760\\ ⇒\frac{x}{\left(\frac{5}{4}\right)}+\frac{x}{{\left(\frac{5}{4}\right)}^{2}}+\frac{x}{{\left(\frac{5}{4}\right)}^{3}}=9760\\ ⇒\frac{4x}{5}+\frac{16x}{25}+\frac{64x}{125}=9760\\ ⇒100x+80x+64x=9760×125\\ x=\frac{9760×125}{244}\\ x=5000\end{array}$

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