Explanation:

To solve this problem, use the formula for compound interest and loan repayment by equal installments. Here's how:

- The present value of the loan (Rs x) is paid back in two equal yearly installments of Rs 35,280.

- Interest rate is 5%, compounded annually.

For each installment:

- First Year: The principal grows to x(1.05).

- Second Year: The remaining principal after paying the first installment grows again on both principal and outstanding interest.

To calculate x:

1. The formula for the present worth of annuity payments is:

$x=\text{Instalment}\times [\frac{1-(1+r{)}^{-n}}{r}]$

2. Fill in the details and solve:

- Instalment = Rs 35,280, r = 0.05, n = 2

- Calculate x.

The calculations yield:

- Option 1: Rs 64,400 – Not correct.

- Option 2: Rs 65,600 – Not correct.

- Option 3: Rs 64,800 – Not correct.

- Option 4: Rs 65,400 – Correct answer.

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