A loan of Rs 12300 at 5 per annum compound interest...

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A loan of Rs. 12300 at 5% per annum compound interest, is to be repaid in two equal annual installments at the end of every year. Find the amount of each installment ?

A. Rs. 6651

B. Rs. 6615

C. Rs. 6516

D. Rs. 6156

Answer: Option B

Solution(By Examveda Team)

$$5\% = \frac{1}{{20}} = \frac{{21 \to {\text{ Installment}}}}{{20 \to {\text{ Principal}}}}$$

Year	Principal	Installment
⇒ I	20_×21 →	21_×21	......(i)
⇒ II	400→	441	.....(ii)

Since, installment is equal, hence multiply equation (i) by 21
⇒ Total principal = 420 + 400 = 820
⇒ 820 units = Rs. 12300
⇒ 1 units = Rs. 15
⇒ 441 units = Rs. 6615
∴ Each installment = Rs. 6615

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