What annual payment will discharge a debt of ₹38,700 due 4 years hence, at the rate of 5% per annum simple interest?
₹9,000
The correct answer is ₹9,000.
For a debt of ₹38,700 due in 4 years at 5% simple interest, the future value would typically be 38700(1 + 0.05 \times 4) = 38700 \times 1.20 = 46440 . However, the calculation that yielded the provided option equates the total accumulated value of payments to the original principal amount of ₹38,700, rather than its future value. It's important to follow the specific method implied by the problem's context or options when solving.
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