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Yes, I noticed that. Interestingly, I used round-about method to reach the solution yesterday, but that was not elegant and it was bothering me (solved for n=2, 3 and extrapolated from there by induction). But your approach is simple and elegant, and right use of Sherman-Morrison formula. Glad I posted the problem on this site.
Thanks Douglas for the reference. As I was working on the problem from your hint, Ian has already posted the solution! Thanks Ian. That's exactly I was looking for. Appreciate your help.