What equal installment of annual payment will discharge a debt which is due as 848 at the end of 4 years at 4% per annum simple interest?

Question

What equal installment of annual payment will discharge a debt which is due as Rs. 848 at the end of 4 years at 4% per annum simple interest?

The above question can be calculated by using the formula $$x= \frac{100P}{100n+\frac{n(n−1)r}{2}}$$ which gives the result $= 200$. My doubt is that $200 \cdot 4 = 800$. So when will the balance $848-800= 48$ be paid?

Answer 1

*you are forgetting the interest on the payments *

Assuming payments at the end of each year,

interest of 4% for 3 years will accrue for 1st 200 when payment is due,

for 2 years for 2nd payment , etc.

The formula you used was devised taking this into account.

You can check that exactly 48 interest would have accrued at time of payment, you have paid the dues fully !