A man borrows a certain sum and pays back in 2 years two equal installments. If the compound interest is reckoned at 4% and if he pays back annually rs.676, what sum did he borrow?
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Answer. Present worth of Rs. P due in n years is given by Present worth =  Therefore, Principal = (Present worth of Rs. 882 due 1 year hence) + (Present worth of Rs. 882 due 2 years hence)  = Rs 840 + Rs 800 = Rs 1640
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