A loan is to be repaid in two equal yearly installments. If the rate of interest is 10% per annum, compounded annually, and each installment is ₹6,897, then find the total interest charged.

₹1,824

Rate of interest = 10%

                            Principal      Amount

1st installment           10       :      11

2nd installment           10²       :    11²

{ As installments are equal, so multiply ratio of first installment by 11 }

1st installment           10×11      :    11 ×11 

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                                  210        :    242

ATQ,

121R = 6897

1R = 57

Interest earned = ( 242 - 210 )R = 32R

= 32 × 57

= Rs. 1824