# Find the Value of Each Installment

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

- ₹ 127
- ₹ 121
- ₹ 210
- ₹225

**Answer: (1) Rs.127**

**Explanation:-**

Principal = Rs.210, Rate = 10%.

The loan has to be paid two installment, It is take two years.

Then, Compound interest = P [1 + R/100]^{2} = 210 (1 + 10/100)^{2}

= 210 x (1 + 1/10)^{2}

= 210 x (11/10)^{2}

= 210 x 11 x 11/10 x 10

= 254

It is equal installment,

Then, 254/2 = Rs.127

Hence, the value of each installment is Rs.127.