Question

A person borrowed Rs. 5550 from is at 4% compound interest Rs 500 was paid each year. what amount paid at the end of 5th year will clear the debt?​

Answer 1

Money left after 1st year :

`M = 5550( 1 + (4)/(100)) - 500 = 5272`

Money left after 2nd year :

`M = 5272( 1 + (4)/(100)) - 500 = 4982.88`

Money left after 3rd year :

`M = 4982.88( 1 + (4)/(100)) - 500 = 4682.19`

Money left after 4rd year :

`M = 4682.19( 1 + (4)/(100)) - 500 = 4369.48`

Money left after 5rd year :

`4369.48(1+(4)/(100))-500 = 4044.26`

At the end of 5th year an amount of Rs 4044.26 will clear the debt.