A sum of rs. 10,000 is borrowed at 8% per annum compounded annually. if the amount is to be paid in three equal installments, the annual installment will be
a.rs 3520.25b) rs 3880.335c) rs 4200.15d) rs 4530.225e) none
Answers
Answered by
6
Option B
Solution:
Let each installment be x,
10000=x/(1+8/100) + x/(1+8/100)2 + x/(1+8/100)3
10000=x{25/27 + (25/27) 2 + (25/27) 3}
=x*25/27(1 + 25/27 + 625/729)
=25x/27 (2029/729)
x =3880.335
Solution:
Let each installment be x,
10000=x/(1+8/100) + x/(1+8/100)2 + x/(1+8/100)3
10000=x{25/27 + (25/27) 2 + (25/27) 3}
=x*25/27(1 + 25/27 + 625/729)
=25x/27 (2029/729)
x =3880.335
Answered by
1
Answer:
Option B.
Step-by-step explanation:
Formula for annual payment:
where,
P is payment.
PV is present value.
r is rate per period.
n is number of periods.
From the given information it is clear that
Present value = 10,000
Rate per period = 0.08
Number of periods = 3
Using the above formula we get
Therefore, the correct option is B.
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