A loan was repaid in two annual instalments of Rs.112 each. If the rate of interest be 10% per annum compounded annually, the sum borrowed was :
Rs.200
Rs.210
Rs.217.80
Rs.280
Explanation:
Principal = (Present value of Rs.121 due 1 year hence ) + (Present value of Rs.121 due 2 years hence )
= Rs. 121(1+10100)+121(1+10100)2121(1+10100)+121(1+10100)2 =Rs.210
Principal = (Present value of Rs.121 due 1 year hence ) + (Present value of Rs.121 due 2 years hence )
= Rs. 121(1+10100)+121(1+10100)2121(1+10100)+121(1+10100)2 =Rs.210