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A sum of Rs. 8584 is to be paid back in 3 equal annual installments. How much is each installment if the interest is compounded annually at 14% per annum?
- ARs. 3700
- BRs. 5400
- CRs. 4500
- DRs. 5500
Answer not set
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CCommunity
Given that principal P = Rs. 8584
Rate R = 14%
Number of investments = 3
⇒ Value of each installment = $(\frac{P}{{\left( {\frac{{100}}{{100\; + \;R}}} \right)\; + \;{{(\frac{{100}}{{100\; + \;R}})}^2}\; + \;{{\left( {\frac{{100}}{{100\; + \;R}}} \right)}^3}}}\; = \;\frac{{8584}}{{\left( {\frac{{100}}{{100\; + \;14}}} \right)\; + \;{{(\frac{{100}}{{100\; + \;14}})}^2}\; + \;{{\left( {\frac{{100}}{{100\; + \;14\;}}} \right)}^3}}})$ = 8584/2.32 = Rs. 3700
Rate R = 14%
Number of investments = 3
⇒ Value of each installment = $(\frac{P}{{\left( {\frac{{100}}{{100\; + \;R}}} \right)\; + \;{{(\frac{{100}}{{100\; + \;R}})}^2}\; + \;{{\left( {\frac{{100}}{{100\; + \;R}}} \right)}^3}}}\; = \;\frac{{8584}}{{\left( {\frac{{100}}{{100\; + \;14}}} \right)\; + \;{{(\frac{{100}}{{100\; + \;14}})}^2}\; + \;{{\left( {\frac{{100}}{{100\; + \;14\;}}} \right)}^3}}})$ = 8584/2.32 = Rs. 3700