A man borrowed money and paid back in two equal annual instalments of Rs1 089 at 10 compound interes...........

Quantitative Aptitude (MTS) Compound Interest

A man borrowed money and paid back in two equal annual instalments of Rs1,089, at 10% compound interest compounded

annually for 2 years. What was the sum (in Rs) borrowed?

This questions was previously asked in

SSC MTS 18th October 2021 Shift-2

2,178

2,090

1,890

1,800

Let’s break down the problem:

- The man pays Rs 1,089 twice (once each year) with 10% compound interest annually.

- Let the loan amount be P.

- The present value of instalments = 1,089/(1.10) + 1,089/(1.10)^2

Calculate:

- 1,089/1.10 = 990

- 1,089/1.21 ˜ 900

- Sum of present values = 990 + 900 = Rs 1,890

So, the initial loan amount was Rs 1,890.

Correct option:

Option 3: 1,890

- Option 1 (2,178) and Option 2 (2,090) are too high.

- Option 4 (1,800) is too low.

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