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 ?

Solution (By Examveda Team)

$$\eqalign{ & {\text{Rate }} \Rightarrow {\text{ 10% = }}\frac{1}{{10}} \cr & {\text{Each installment of 2 years}} \cr & \Rightarrow \frac{{10}}{{11}} \times \frac{{\left( {10 + 11} \right)}}{{11}} \times {\text{ Installment = P}}{\text{.A}} \cr & {\text{P}}{\text{.A = 21000}} \cr & {\text{Each installment = 12100}} \cr} $$