A loan of Rs. 12300 at 5% per annum compound interest, is to be repaid in two equal annual installments at the end of every year. Find the amount of each installment ?

Answer: Option B

$$5\%=\frac{1}{20}=\frac{21\to \text{ Installment}}{20\to \text{ Principal}}$$

Year	Principal	Installment
⇒ I	20×21 →	21×21	......(i)
⇒ II	400→	441	.....(ii)

Since, installment is equal, hence multiply equation (i) by 21
⇒ Total principal = 420 + 400 = 820
⇒ 820 units = Rs. 12300
⇒ 1 units = Rs. 15
⇒ 441 units = Rs. 6615
∴ Each installment = Rs. 6615