A sum of money is borrowed and paid back in two annual instalments of Rs.882 each allowing 5% C.I.The sum borrowed was: Rs.1680 b) Rs.1142 c) Rs.640 d) Rs.1640 Solutionamount
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The formula for annual compound interest, including principal sum, is:
A = P (1 + r/n) (nt)
Where:
A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested or borrowed for
so
882+882=p
amount=p*(1+r/100)^n
1764= 882 / (1+5/100) + 882 / (1+5/100)^2
= (882*20)/21 + (882*20*20)/(21*21)
= 1640
D is correct option
A = P (1 + r/n) (nt)
Where:
A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested or borrowed for
so
882+882=p
amount=p*(1+r/100)^n
1764= 882 / (1+5/100) + 882 / (1+5/100)^2
= (882*20)/21 + (882*20*20)/(21*21)
= 1640
D is correct option
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