# | | Question 32

Ram buy a second hand bike of Rs 13600 as a loan which along with interest is to be paid in two equal annual installment.If the rate of interest is 12.5 % compounded annually, then the value of each installment is:

**(A)** Rs 8100

**(B)** Rs 8300

**(C)** Rs 8500

**(D)** Rs 9100

**Answer:** **(A)** **Explanation:** Rate of interest = 12.5% =1/8

Principal Installment 1st year 8 9 (1) 2nd year 8^{2}9^{2}(2)

Since, installment is equal in both years so multiply (1) by 9

Total principal = 64 + 72 = 136

136 -> 13600

1 -> 100

81 -> 8100

So, each installment equal to **Rs 8100.**

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