Question

What annual payment will discharge a debt of rs. 1025 due in 2 years at the rate of 5% compound interest?:

Answer 1

Answer:

Rs 10000

Step-by-step explanation:

What annual payment will discharge a debt of rs. 1025 due in 2 years at the rate of 5% compound interest?:

As per compound interest formula Amount will be

Interest = P (1 + r/100)ⁿ - P

P = Principle = 1025

n = 2  Years

r = 5% Per annum

Interest= P ( 1 + 5/100)² - P

= P ( 1.05² - 1)

= P (2.05)(.05)

Interest will pay off for debt = rs 1025

=> P (2.05)(.05) = 1025

=> P = 10000

Rs 10000