Question
A man, borrow Rs 21000 at 10% compound interest. How much he has to pay annually at the end of each year, to settle his loan in two years ?
Answer: Option B
$$\eqalign{
& {\text{Rate }} \Rightarrow {\text{ 10% = }}\frac{1}{{10}} \cr
& {\text{Each installment of 2 years}} \cr
& \Rightarrow \frac{{10}}{{11}} \times \frac{{\left( {10 + 11} \right)}}{{11}} \times {\text{ Installment = P}}{\text{.A}} \cr
& {\text{P}}{\text{.A = 21000}} \cr
& {\text{Each installment = 12100}} \cr} $$
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$$\eqalign{
& {\text{Rate }} \Rightarrow {\text{ 10% = }}\frac{1}{{10}} \cr
& {\text{Each installment of 2 years}} \cr
& \Rightarrow \frac{{10}}{{11}} \times \frac{{\left( {10 + 11} \right)}}{{11}} \times {\text{ Installment = P}}{\text{.A}} \cr
& {\text{P}}{\text{.A = 21000}} \cr
& {\text{Each installment = 12100}} \cr} $$
Was this answer helpful ?
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