A self-help group lends ₹7000 to a member at 10% per annum simple interest, to be repaid in two equal annual instalments, the first falling due one year after the loan. Each instalment (in ₹) is:

Bring everything to the end of year 2. The debt then stands at $7000(1+0.10\times 2)$ = ₹8400. The first instalment, paid a year earlier, is worth $x(1+0.10)$ by then and the second is worth $x$, so $1.1x+x=8400$ → $2.1x=8400$ → $x$ = ₹4000. (Splitting the loan in half at ₹3500 charges no interest at all, and ₹4200 halves the ₹8400 as though both instalments were paid on the last day.)