A builder borrows ₹2550, which is to be repaid in two equal annual installments at the end of each year, with compound interest at the rate of 4% per annum. What will be the amount of each installment?

Step 1: Present value equation

First installment is paid at end of 1st year → discount it for 1 year
Second installment is paid at end of 2nd year → discount it for 2 years

So,
$\frac{x}{1.04} + \frac{x}{(1.04)^2} = 2550$

Step 2: Simplify

$1.04 = \frac{26}{25}$

So,
$\frac{x}{1.04} = x \cdot \frac{25}{26}$
$\frac{x}{(1.04)^2} = x \cdot \frac{625}{676}$

Now equation becomes:
$x\left(\frac{25}{26} + \frac{625}{676}\right) = 2550$

LCM = 676

$\frac{25}{26} = \frac{650}{676}$

So,
$x\left(\frac{650 + 625}{676}\right) = 2550$

$x \cdot \frac{1275}{676} = 2550$

Step 3: Solve for $x$

$x = 2550 \times \frac{676}{1275}$

Simplify:
$\frac{2550}{1275} = 2$

So,
$x = 2 \times 676 = 1352$

Final Answer: Rs 1352