Correct Answer - Option 1 : Rs.520
Given∶
Debt = Rs.1320
Time = 3 years
rate = 10%
Formula Used∶
S.I = PRT/100
In simple interest, The interest is not added in the principal amount during the year.
So, the amount paid = Principal amount + simple interest of the 3 years
Calculation∶
Let the annual installment per year be Rs.x .
So, there will be 3x installments in 3 years.
1320 + S.I of 3 years = 3x (1)
Rate of interest = 10%
Now,
S.I = PRT/100
S.I1 = (1320 × 10 × 1)/100 = 132
Now in 2nd year, the principal remains = (1320 - x )
So, S.I.2 = [(1320 - x ) × 10 × 1]/100 = 132 - x/10
Now, in final year, the principal remains = (1320 - 2x)
S.I3 = [(1320-2x) × 10 × 1]/100 = 132 - 2x/10
From eq. 1,
1320 + 132 + 132 - x/10 + 132 - 2x/10 = 3x
⇒ 17160 - 3x = 30x
⇒ 33x = 17160
⇒ x = Rs. 520
∴ The required annual installment have to pay that will discharged a debt of Rs.1320 is Rs. 520.