CAT 2025 Slot 2 QA Question 1: A loan of Rs $1000$ is fully repaid by two installments of Rs $530$ and Rs $594$, paid at the end of first and second year, respectively. If the interest is compounded annually, then the rate of inter

Question

A loan of Rs $1000$ is fully repaid by two installments of Rs $530$ and Rs $594$, paid at the end of first and second year, respectively. If the interest is compounded annually, then the rate of inter

Accepted Answer

Let $y = 1 + r$, where $r$ is the annual interest rate in decimal form.

After one year and the first payment, the remaining amount grows for one more year and becomes the second payment.
$(1000 y - 530)y = 594$
$\Rightarrow 1000 y^2 - 530 y - 594 = 0$

Checking the CAT answer choices, $y = 1.08$ sa

A loan of Rs 100010001000 is fully repaid by two installments of Rs 530530530 and Rs 594594594, paid at the end of first and second year, respectively. If the interest is compounded annually, then the rate of interest, in percentage, is

A loan of Rs $1000$ is fully repaid by two installments of Rs $530$ and Rs $594$ , paid at the end of first and second year, respectively. If the interest is compounded annually, then the rate of interest, in percentage, is