A sum of Rs. 13,360 was borrowed at 8 3\4% per annum compound interest and paid back in two years in two equal annual installments. What was the amount of each installment?

Explanation:

Rate of interest(r)

=8 3\4=7\80=87→Installment\80→Principal

=1 80×87→87×87…….1

=2 6400→7569………2

Since, installment is equal hence multiply equation 1 by 87

Total principal=6960+6400

=13360

13360 units = Rs.13360

1 unit = Rs. 1

7569 units = 7569

∴Each installment = 7569