Question
Pankaj takes a loan of Rs. 10000 at 10% per annum compounded annually which is to be repaid in two equal annual instalments: one at the end of the first year and second at the end of the second year. The value of each instalment is:
Answer: Option A
:
A
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A
Let the value of each installment is X, Total amount is P
P=X(K+K2+K3+...................),Where K=100100+r Here only two years and r is 10% then
P=X(K+K2)
10000=x{1011+(1011)2}
X = 5761.9
Alternatively
10,000(1.1)2=x[1+(1.1)]
x = 5761.9
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