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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
  • a)
    Rs. 127
  • b)
    Rs. 121
  • c)
    Rs. 210
  • d)
    Rs. 225
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
A sum of Rs. 210 was taken as a loan. This is to be paid back in two ...
Let x be the value of installment.
Principal = Present value of x for 1 year + Present value of x for 2 years
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Most Upvoted Answer
A sum of Rs. 210 was taken as a loan. This is to be paid back in two ...
Solution:

Let's assume the value of each installment to be x.

The sum of the two equal installments would be 2x.

Calculating the compound interest:

The principal amount is Rs. 210.

The rate of interest is 10% compounded annually.

The time period is 1 year.

Using the formula for compound interest, we can calculate the compound interest on the loan:

Compound Interest = P(1 + R/100)^n - P

Compound Interest = 210(1 + 10/100)^1 - 210

Compound Interest = 210(1 + 0.1) - 210

Compound Interest = 210(1.1) - 210

Compound Interest = 231 - 210

Compound Interest = 21

Calculating the value of each installment:

Since the loan is to be paid back in two equal installments, the sum of the two installments is equal to the loan amount plus the compound interest.

2x = 210 + 21

2x = 231

x = 231/2

x = 115.5

Therefore, the value of each installment is Rs. 115.5.

The given answer, Rs. 121, is not correct.
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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 isa)Rs. 127b)Rs. 121c)Rs. 210d)Rs. 225Correct answer is option 'B'. Can you explain this answer?
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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 isa)Rs. 127b)Rs. 121c)Rs. 210d)Rs. 225Correct answer is option 'B'. Can you explain this answer? for Railways 2024 is part of Railways preparation. The Question and answers have been prepared according to the Railways exam syllabus. Information about 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 isa)Rs. 127b)Rs. 121c)Rs. 210d)Rs. 225Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Railways 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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 isa)Rs. 127b)Rs. 121c)Rs. 210d)Rs. 225Correct answer is option 'B'. Can you explain this answer?.
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