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What annual payment will discharge a debt of Rs 1025 due in 2 years at a compound interest rate of 5% per annum?
  1. 500
  2. 525.50
  3. 540
  4. 551.25
Explanation
Let each installment be Rs. x. Then,
x/(1 + 5/100) + x/(1 + 5/100)2 = 1025
820x + 1025 * 441
x = 551.25
So, value of each installment = Rs. 551.25

Last verified on 11-05-2026

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