What annual payment will discharge a debt of Rs 1025 due in 2 years at a compound interest rate of 5% per annum?
Answer: 551.25
Explanation
We use the compound interest installment formula to find equal annual payments:
Where:
-
P=₹1025 (debt)
-
r=5%=0.05
-
x = annual payment
-
Time = 2 years
Substitute values:
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