To buy a car, Sahil borrowed some amount at 10% simple interest rate. He has paid some loan amount but Rs. 1,81,500 is due which he has to pay in 3 years. What will be the annual installment (in Rs.)?

Let the annual installment be x.
The total amount cleared by 3 installments at a simple interest rate of 10% over 3 years is given by the sum of the installments and the interest accrued on them until the end of the period.

The 1
st
installment will earn interest for 2 years: x+
100
x×10×2
​
=1.2x

The 2
nd
installment will earn interest for 1 year: x+
100
x×10×1
​
=1.1x

The 3
rd
installment is paid at the end and earns no interest: x

Summing these up gives the total debt:

1.2x+1.1x+x=1,81,500
3.3x=1,81,500
x=
3.3
1,81,500
​
=55,000
Thus, the annual installment is Rs. 55,000.