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A sum of ₹550 was taken a loan . this is to be paid back in two equal instalments .If the rate of interest be 20% compounded annually then the value of each instalment is?
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Most Upvoted Answer
A sum of ₹550 was taken a loan . this is to be paid back in two equal ...
Let x be each installment

After paying the first installement x

the remaininng principle is 550×1.2−x

This then compounded yearly should be equal to the second installment

(550×1.2−x)×1.2=x

550×1.22−x×1.2=x

792=2.2×x

x=360

Thus eachn installemnt should be Rs.360

hope it helps..
Community Answer
A sum of ₹550 was taken a loan . this is to be paid back in two equal ...
Given information:
- Loan amount: ₹550
- Loan to be paid back in two equal installments
- Interest rate: 20% compounded annually

Calculating the installment amount:
To calculate the installment amount, we need to determine the total amount to be paid back, including the principal amount and the interest.

Step 1: Calculating the interest:
Using the compound interest formula:
A = P(1 + r/n)^(nt)
where:
A = final amount
P = principal amount
r = interest rate (in decimal form)
n = number of times interest is compounded per year
t = time in years

In this case, the interest is compounded annually (n = 1) and the time is 1 year (t = 1).
Substituting the values:
A = 550(1 + 0.20/1)^(1*1)
A = 550(1 + 0.20)
A = 550(1.20)
A = ₹660

Step 2: Calculating the installment amount:
Since the loan is to be paid back in two equal installments, each installment will be half of the total amount to be paid back.
Installment amount = Total amount to be paid back / Number of installments
Installment amount = ₹660 / 2
Installment amount = ₹330

Answer:
The value of each installment is ₹330.
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A sum of ₹550 was taken a loan . this is to be paid back in two equal instalments .If the rate of interest be 20% compounded annually then the value of each instalment is?
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