A sum of money is borrowed and paid back in two annual installments of Rs. 882 each allowing 5% C.I. The sum borrowed was?

A. Rs. 1620
B. Rs. 1640
C. Rs. 1680
D. Rs. 1700

Explanation:

Principal = (P.W. of Rs. 882 due 1 year hence) + (P.W. of Rs. 882 due 2 years hence)

= [882/(1 + 5/100) + 882/(1 + 5/100)2]
= (882 * 20)/21 + (882 * 400)/441 = Rs. 1640.

Compound Interest

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