Question

A builder borrows rs. 2550 to be paid back with compound interest at the rate of 4% per annum by the end of 2 years in two equal yearly installments. How much will each installment be? ? Ans

Answer 1

Answer:

Given

P = Rs. 2550.  

R = 4%

n = 2 years.

let installment = x

P= x/ (1+4/100) +x/(1+4/100)$^{2}$

=> 2550= x/1.04+ x/1.04+1.04

=> 2550= x/1.04 (1+1/1.04)

=> 2550= x/1.04 ×2.04 /1.04

=> 2550= 2.04x /1.0816

=> 2550 × 1.0816= 2.04x

=> 2758.08 / 2.04 =x

=> x = 1352

Equal installment would = Rs 1352

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@GauravSaxena01

Answer 2

Answer:

Each installment paid by the builder will be Rs. 28,125

Step-by-step explanation:

A= future amount of investment including interest

P= Initial amount of investment

r= annual rate of interest

n= number of times interest is compounded per year

t= number of years for which the money is invested or borrowed

P= Rs.2250

r=4%

n=1

t=2 years

A= P (1+r/n) ^(nt)

  = 2250 ( 1+ 4/1) ^ (1x2)

   = 2250 (1+4) ^ 2

    = 2250 (5) ^ 2

    = 2250 x 25

     = Rs. 56,250

So the future amount of investment for 2 years is Rs. 56,250.

So, the amount of each installment will be = Rs. 56,250 / 2

                                                                       = Rs. 28,125