A sum of ₹ 1260 is borrowed from a money lend | vedclass

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(A) Let the annual instalment be $x$. Given: Principal $P = 1260$,Rate $R = 10 \%$,Time $n = 2$ years. The formula for the present value of two equal

Vedclass · Accepted Answer

$726$

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(A) Let the annual instalment be $x$. Given: Principal $P = 1260$,Rate $R = 10 \%$,Time $n = 2$ years. The formula for the present value of two equal annual instalments is: $P = \frac{x}{(1 + \frac{R}{100})} + \frac{x}{(1 + \frac{R}{100})^2}$ Substituting the values: $1260 = \frac{x}{(1 + \frac{10}{100})} + \frac{x}{(1 + \frac{10}{100})^2}$ $1260 = \frac{x}{(1.1)} + \frac{x}{(1.1)^2}$ $1260 = \frac{x}{1.1} + \frac{x}{1.21}$ $1260 = \frac{1.1x + x}{1.21} = \frac{2.1x}{1.21}$ $x = \frac{1260 	imes 1.21}{2.1}$ $x = 600 	imes 1.21 = 726$ Therefore,the annual instalment is ₹ $726$.

$A$ sum of ₹ $1260$ is borrowed from a money lender at $10 \%$ p.a. compounded annually. If the amount is to be paid back in two equal annual instalments,find out the annual instalment (in ₹).

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