A sum of ₹ 11000 was taken as loan. This is to be paid in two equal annual installments. If the rate of interest be 20% compounded annually, then the value of each installment is
Correct Answer: ₹ 7200
Explanation:
Let value of each installment be ₹ N .
Then, N/(1 + 20/100) + N/(1 + 20/100)2 = 11000
⇒ N(5/6 + 25/36) = 11000
⇒ N(56/36) = 11000
∴ N = ₹ 7200
