A sum of Rs 210 was taken as a loan. This is to be paid back in two equal installments. If the rate of interest be 10% compounded annually, then the value of each installment is = ?

A. Rs. 127

B. Rs. 121

C. Rs. 210

D. Rs. 225

Answer: Option B

Solution(By Examveda Team)

$$\eqalign{ & {\text{Rate of interest}} \Rightarrow {\text{ 10% = }}\frac{1}{{10}} \cr & {\text{Each installment of 2 years}} \cr & \Rightarrow \frac{{10}}{{11}} \times \frac{{\left( {10 + 11} \right)}}{{11}} \times {\text{ Installment = P}}{\text{.A}} \cr & \Rightarrow \frac{{10}}{{11}} \times \frac{{\left( {10 + 11} \right)}}{{11}} \times {\text{ Installment = 210}} \cr & \Rightarrow {\text{Installment = 121}} \cr} $$