Annual interest

A loan of 10 000 euros is to be repaid in annual payments over ten 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=101=0.1 n=10  q=(1+r)n=(1+101)102.5937  a=l q1r q=10000 2.593710.1 2.5937=1627.45 Eur
i=n al=10 1627.453910000=6274.54 Eur

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