What annual payment will discharge a debt of Rs. 600 due in 5 years, the rate being 8 % per annum?

Answer 1

The annual payment that will discharge a debt of rs A due in "t" years at the rate of interest r% per annum is

(100A)/(100t+((rt(t-1))/2))

here A=600
t=5
r=8

hence (100*600)/(100*5+((8*5(5-1))/2))
100*600/580
=103.448 (answer)

Answer 2

Let the annual payment be Rs. x
Now
(Amount of x for 4 years) + (Amount of x for 3 years) + (Amount of x for 2 years) + (Amount of x for 1 year) + x = 600
[x+ (x*4*8)/100] + [x+ (x*3*8)/100] + [x+ (x*2*8)/100] + [x+ (x*1*8)/100] + x = 600

5x + [(32x + 24x + 16x + 8x)/100] = 600
or
5x + 80x/100 = 600 i.e. 5.8x = 600

Means
x = 103.45