A sum of money is paid back in two annual instalments of Rs. 17, 640 each, allow

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A sum of money is paid back in two annual instalments of Rs. 17, 640 each, allowing 5% compound interest compounded annually. The sum borrowed was

Options:

A . Rs.32,400

B . Rs.32,800

C . Rs.32,000

D . Rs.32,200

Answer: Option B
Answer: (b)Using Rule 9(i),Sum borrowed = Present worth of Rs.17640 due 1 year hence + Present worth of Rs.17640 due 2 years hence= Rs.$(17640/{(1 + 5/100)} + 17640/{(1 + 5/100)^2})$= Rs.$(17640 × 20/21 + 17640 × 20/21 × 20/21)$= Rs.(16800 + 16000) = Rs.32800

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