Question

loan of Rs 4641 is to be paid back by 4 equal annual instalments. The interest is compounded yearly at 10%. Find the value of each instalment.​

Answer 1

Answer:

Equated Annual Installments = 1464.1

Step-by-step explanation:

Loan Amount to be Paid = Rs 4641

Equal annual Installments = 4

Compound interest = 10 %

We will use here the formula for Equated Annual Installemnts

Equated Installments = [P x R x (1+R)^N]/[(1+R)^N-1]

P = 4641

N = 4

R = 10 % = 0.1

Equated Annual Installments = 4641 * 0.1 * 1.1⁴ /(1.1⁴ - 1)

= 1464.1

Answer 2

Given:

Loan to be paid, P = 4641

Annual installments, N = 4

Compound interest, R = 10% i.e., 0.1

To Find:

The value of each installment = ?

Solution:

As we know,

$Equated \ installments = \frac{P\times R\times (1+R)^N}{(1+R)^N-1}$

On putting the estimated values, we get

⇒                                 $=\frac{4641\times 0.1\times (1.1)^4}{(1.1)^4-1}$

⇒                                 $= \frac{464.1\times 1.4641}{1.4641-1}$

⇒                                 $= \frac{679.48881}{0.4641}$

⇒                                 $=1464.1$

So that the each installment will be "1464.1".