https://file.aiquickdraw.com/mathbot/file/17308075027455hms9oqb.jpg

The question in the image asks:

"A sum of 6840 is borrowed at 5% simple interest and is paid back in 4 equal annual installments. What is the amount of each installment?"

### Solution Explanation:

To solve this, let's break down the given solution step-by-step.

1. **Principal (P)** = 6840
2. **Rate of Interest (R)** = 5% per annum
3. **Time (T)** = 4 years (since the installment is paid back annually in 4 equal parts)

The formula used for calculating Simple Interest (SI) over time \( T \) is:
\[
SI = \frac{P \times R \times T}{100}
\]
But here, since we need to divide the total amount (Principal + Interest) into 4 equal installments, the calculation differs a bit.

### Calculation Steps

1. **Calculate the total interest over 4 years**:
   \[
   SI = \frac{6840 \times 5 \times 4}{100} = 1368
   \]
   
2. **Total amount to be paid**:
   \[
   A = P + SI = 6840 + 1368 = 8208
   \]

3. **Annual Installment**:
   Since the total amount \( A = 8208 \) needs to be paid back in 4 equal installments:
   \[
   \text{Annual Installment} = \frac{8208}{4} = 2052
   \]

Thus, each installment amount is **Rs. 2052**, which corresponds to option **(B)** in the question.

Would you like further details on any step, or do you have any questions?

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### Related Questions for Further Practice

1. If the interest rate were 6%, what would each installment amount be?
2. How would the installment amount change if the loan term were 5 years instead of 4?
3. How much total interest is paid on a loan of Rs. 10,000 at 5% simple interest over 3 years?
4. What is the formula for calculating installment payments under compound interest?
5. If the principal were Rs. 5000 instead of Rs. 6840, what would each installment amount be under the same conditions?

#### Tip:
When calculating installment payments, ensure you know whether the interest is simple or compound, as this significantly impacts the total repayment amount.

A sum of 6840 is borrowed at 5% simple interest and is paid back in 4 equal annual installments. What is the amount of each installment?

Learn how to calculate equal annual installments for a loan of Rs. 6840 at 5% simple interest over 4 years. This solution covers key concepts, including the simple interest formula and installment calculation. Suitable for high school students preparing for finance-related math problems.

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