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

Solution :

Money left after 1st year :

$M = 5550( 1 + \dfrac{4}{100}) - 500 = 5272$

Money left after 2nd year :

$M = 5272( 1 + \dfrac{4}{100}) - 500 = 4982.88$

Money left after 3rd year :

$M = 4982.88( 1 + \dfrac{4}{100}) - 500 = 4682.19$

Money left after 4rd year :

$M = 4682.19( 1 + \dfrac{4}{100}) - 500 = 4369.48$

Money left after 5rd year :

$4369.48(1+\dfrac{4}{100})-500 = 4044.26$

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