Annual interest

A loan of 10 000 euro is to be repaid in annual payments over 10 years. Assuming a fixed 10% annual interest rate compounded annually, calculate:

(a) the amount of each annual repayment
(b) the total interest paid.

Correct answer:

a =  1627.45 Eur
i =  6274.54 Eur

Step-by-step explanation:

l=10000 eur r=10%=10010=0.1 n=10  a=l (1+r)n1r (1+r)n=10000 (1+0.1)1010.1 (1+0.1)10=1627.45 Eur=1.6103 Eur
i=n al=10 1627.453910000=6274.54 Eur=6.3103 Eur



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