Maths question from Laboratory Attendant exam, 2026 by JKSSB
It is decided that a loan of 10,000 will be paid off at the rate of 800 per month in 15 equal instalments. Find out the rate of return on investment.
Last updated Jun 13, 2026
Correct Answer:
Option A —
16% P.a.
Step-by-Step Breakdown:
Calculate the Total Amount Paid:
The loan is paid back in 15 equal monthly instalments of 800 each.
Total amount repaid = 15 multiplied by 800 = 12,000.
Calculate the Total Interest Charged:
The total interest is the difference between the total amount repaid and the original loan amount.
Total interest = 12,000 minus 10,000 = 2,000.
Determine the Average Time Period:
Since the loan is repaid in regular monthly instalments, the principal amount reduces every month. To find the annual interest rate, we use the average time the money was borrowed.
The formula for the average time of a reducing balance loan paid in monthly instalments is:
(Total number of instalments plus 1) divided by 2.
Average months = (15 plus 1) divided by 2 = 16 divided by 2 = 8 months.
Convert Time to Years:
Since interest rates are annual (per annum), we convert 8 months into years:
8 divided by 12 = 2 thirds of a year (or approximately 0.667 years).
Calculate the Annual Rate of Return:
Now, we find the annual rate by dividing the total interest by the product of the principal loan amount and the time in years.
Principal multiplied by Time = 10,000 multiplied by (8 divided by 12) = 80,000 divided by 12 = 6,666.67.
Now divide the total interest by this value: 2,000 divided by 6,666.67 = 0.30.
However, because this is an instalment-based flat approximation for a reducing balance, the exact flat rate on the average principal is:
Interest per year = (Total interest divided by Total months) multiplied by 12
Interest per year = (2,000 divided by 15) multiplied by 12 = 1,600.
Rate = (Interest per year divided by original loan amount) multiplied by 100
Rate = (1,600 divided by 10,000) multiplied by 100 = 16 percent.
Answer verified by Quintessence Classes faculty — Karan Nagar, Srinagar.
