What will be the annual payment on a debt of Rs 660 in 3 annual equal…

Step-by-Step Solution

To settle a debt of Rs. 660 in 3 annual equal installments at 10% Simple Interest per annum, we use the formula for equal installments.

1. Understand the Formula: For a debt (D) to be paid in t equal annual installments (P) at a rate of interest (r%), the formula is: D = (P * t) + (P * r * t * (t - 1)) / (100 * 2)

   To find the Annual Payment (P): P = (D * 100) / ((100 * t) + (r * t * (t - 1) / 2))

2. Substitute the given values:

   • D (Due Debt) = 660

   • r (Rate) = 10%

   • t (Time/Installments) = 3

   P = (660 * 100) / ((100 * 3) + (10 * 3 * (3 - 1) / 2))

3. Perform the calculation:

   • P = 66,000 / (300 + (30 * 2 / 2))

   • P = 66,000 / (300 + 30)

   • P = 66,000 / 330

   • P = 200

The annual payment is Rs. 200.