A woman borrowed ₹25,220 and she returned the money in three equal instalments after one, two and three years. If the rate of compound interest is 5\% - Quantitative Aptitude MCQ UP Police Constable 2026 | ExamTest.live

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A woman borrowed ₹25,220 and she returned the money in three equal instalments after one, two and three years. If the rate of compound interest is 5%, then find the value of each instalment.

Solution & Step-by-step Explanation

Let each equal annual installment be x . Rate of interest R = 5% = \frac{1}{20} . The formula relating the Principal (P) and installments (x) is: P = \frac{x}{( 1 + \frac{R}{100} )} + \frac{x}{( 1 + \frac{R}{100} ) ^{2}} + \frac{x}{( 1 + \frac{R}{100} ) ^{3}} 25220 = x (\frac{20}{21}) + x (\frac{20}{21})^{2} + x (\frac{20}{21})^{3} 25220 = x [\frac{20}{21} + \frac{400}{441} + \frac{8000}{9261}] Taking the common denominator as 9261 : 25220 = x [\frac{20 \times 441 + 400 \times 21 + 8000}{9261}] 25220 = x [\frac{8820 + 8400 + 8000}{9261}] 25220 = x [\frac{25220}{9261}] x = 9261 Thus, the value of each instalment is ₹9,261.

Try it yourself before checking the explanation above.

A woman borrowed ₹25,220 and she returned the money in three equal instalments after one, two and three years. If the rate of compound interest is 5%, then find the value of each instalment.

₹9,000

₹8,261

₹8,000

₹9,261

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