A sum of Rs. 13360 was borrowed at 83/4 % per annum compound interest and paid back in two years in two equal annual installments. What was the amount of each installment ?

Answer: Option B

$$\begin{array}{rl}& \text{Rate of interest (r)}\\ & \text{ = 8}\frac{3}{4}\%=\frac{7}{80}=\frac{87\to \text{ Installment}}{80\to \text{Principal}}\end{array}$$

⇒	I	80×87	→	87×87	......(i)
⇒	II	6400	→	7569	......(ii)

Since, installment is equal hence multiply equation (i) by 87
⇒ Total principal = 6960 + 6400 = 13360
⇒ 13360 units = Rs. 13360
⇒ 1 units = Rs. 1
⇒ 7569 units = Rs. 7569
∴ Each installment = Rs. 7569