1. A sum of Rs. 3310 is to be paid back in 3equal annual installments. What is the total interest charged if the interest is compounded annually at 10%?

* a. Rs.1331
* b. Rs. 683
* c. Rs. 331
* d. Rs. 993

• ans.b
  each installment to be paid every year= p.i/(1-(1/(1+i))^n)
  p=borrowed amount, i= interest rate
  installment= 3310*0.1/(1-(1/1.1)^3) = 1331 per installment.
  total amount paid back=1331*3 =3993 Rs.
  interest=3993-3310= 683Rs.
• 12 years agoHelpfull: Yes(5) No(8)