A sum of ₹ 210 was taken as a loan. This is to be paid

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A sum of ₹ 210 was taken as a loan. This is to be paid back in two equal instalments. If the rate of interest be 10% compounded annually, then the value of each instalment is

1. ₹ 127
2. ₹ 121
3. ₹ 210
4. ₹ 225

Correct Option: B

Here , Loan = ₹ 210 , R = 10%
Let the value of each instalment be ₹ y
∴ Principal = Present worth of₹ y due 1 year hence, present worth of Rs. y due 2 years hence

⇒ 210 =	y			+	y

		1 +	R			1 +	R	2
			100				100

⇒ 210 =	y			+	y

		1 +	10			1 +	10	2
			100				100

⇒ 210 =	y		+	y

	1 +	1			1 +	1	2
		10				10

⇒ 210 =	y	+	y

	11			11	2
	10			10

⇒ 210 =	10y	+	100y
	11		121

⇒ 210 =	110y + 100y
	121

⇒ 210 × 121 = 210 y

⇒ y =	210 × 121	= ₹ 121
	210