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 A man borrows money from a finance company and has to pay it back in 2 equal Half Yearly installments of Rs 4945 each. If the interest is charged by the finance company at the rate of 15 % per annum compounded as installment plan, find the principal and tSolution:Your problem -> A man borrows money from a finance company and has to pay it back in 2 equal Half Yearly installments of Rs 4945 each. If the interest is charged by the finance company at the rate of 15 % per annum compounded as installment plan, find the principal and tInstallAmt = 4945No of Installment = 2Rate = 15/2The amount of 4945 Rs paid at the end of 1st Year has its principal equal to  = 4945 / ( 1 + 15/2 / 100 ) = 4945 / ( 215/2 / 100 ) = 4945 × 40/43Similarly, for 2^(nd) Year = 4945 × (40/43)^2:. The total of the present values of the 2 Installment is Rs ( 4945 × 40/43 + 4945 × (40/43)^2 ) = 381800/43Total Amount Paid = 4945 × 2 = 9890Interest = Total Paid - Balance Amount = 9890 - 381800/43 = 43470/43

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