Question

A sum of 8000 is borrowed at 5 % compound interest and paid

Answer 1

400 compound interest will be given

Answer 2

Answer:2937.67

Explanation:Now firstly it is compound interest which you have to keep in mind...

As we know 3 installements are being paid annually which will be deducted from the total amount annually..

Lets begin...

For Ist yr

8000*5/100 == 400

Amount ==8000+400=8400

X= installement

(8400-X ) principal for next year

For 2nd yr..

(8400-X)*5/100=(420-0.05x)

Amount=(8400-X)+(420-0.05X)=8820-1.05X

Deduct installment X again from amount which will be principal for next yr which is (8820-2.05X)

For 3rd yr..

(8820-2.05X)*5/100=(441-0.1025X)

Amount =p+ci

Amount =(9261-2.1525X)

Deduct 3rd installment X from amount

(9261-3.1525X) ...Now this is the last deduction after which our due amount will be 0

So equate it equal to 0

9261-3.1525X=0

X=2937.67 hence done