What annual instalment will discharge a debt of ₹26,160 due in 4 years at 6% simple interest per annum?

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Let the annual instalment be ₹x, paid at the end of each year for 4 years. Each instalment earns simple interest at 6% p.a. until the end of the 4th year.

The present value of all instalments at the end of 4 years should equal ₹26,160.

Let's calculate the amount contributed by each instalment at the end of 4 years:

- 1st instalment: paid at end of 1st year, earns interest for 3 years
  Amount at end of 4 years = x + x × 6% × 3 = x + 0.18x = 1.18x
- 2nd instalment: paid at end of 2nd year, earns interest for 2 years
  Amount at end of 4 years = x + x × 6% × 2 = x + 0.12x = 1.12x
- 3rd instalment: paid at end of 3rd year, earns interest for 1 year
  Amount at end of 4 years = x + x × 6% × 1 = x + 0.06x = 1.06x
- 4th instalment: paid at end of 4th year, earns no interest
  Amount at end of 4 years = x

Sum of all instalments at end of 4 years:
1.18x + 1.12x + 1.06x + x = (1.18 + 1.12 + 1.06 + 1)x = 4.36x

Set equal to ₹26,160:
4.36x = 26,160
x = 26,160 / 4.36
x = 6,000

Therefore, the required annual instalment is ₹6,000.

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