Kamal took Rs. 6800 as a loan which along with interest is to be repaid in two equal annual installment. If the rate of interest is 121/2 % compounded annually, then the value of each installment is = ?

Answer: Option C

$$\begin{array}{rl}& \text{Rate of interest}\\ & \text{r}=\text{12}\frac{1}{2}\%=\frac{1}{8}\end{array}$$

Year	Principal	Installment
⇒ I	8×9 →	9×9	......(i)
⇒ II	64 →	81	......(ii)

Since, installment is equal hence multiply equation (i) by 9
⇒ Total principal = 72 + 64 = 136 units
136 units → 6800
1 units → 50
81 units → 4050
⇒ Each installment = Rs. 4050