A sum of money was borrowed and paid back in two equal annual instalments of ₹980, allowing 4% compound interest. The sum (in ₹, to the nearest tens) borrowed was:

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SSC CGL 2021 Tier-I (Held On : 11 April 2022 Shift 3)
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  1. 1,960
  2. 1,850
  3. 1,760
  4. 2,050

Answer (Detailed Solution Below)

Option 2 : 1,850
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PYST 1: SSC CGL - English (Held On : 11 April 2022 Shift 1)
25 Qs. 50 Marks 12 Mins

Detailed Solution

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Given:

Each installment = ₹ 980

Rate of interest = 4%

Number of years = 2

Formula used:

In case of compound interest, borrowed money = x/(1 + r/100) + x/(1 + r/100)2 + ..... + x/(1 + r/100)n

Calculation:

The borrowed money =

=

= [980 × (25/26)] + [980 × (25/26) × (25/26)]

= 980 [(25/26) + (25/26) × (25/26)]

=

= 980 × [(650 + 625)/676]

= 980 × (1275/676)

= 1848.372...

≈ 1850 (in ₹, to the nearest tens)

∴ The sum (in ₹, to the nearest tens) borrowed was ₹ 1850

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